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CONTRACTUAL RISK TRANSFER SEMINAR

CONTRACT RISK ALLOCATION
Presented by

Gerald I. Katz
Partner Katz & Stone, L.L.P.

Monday, October 29, 9:00 a.m.-5:00 p.m.

Copyright © 2001 International Risk Management Institute, Inc.

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Gerald I. Katz
Partner Katz & Stone, L.L.P.
Mr. Katz has speaking responsibility at two IRMI Construction Risk Conference sessions: He is a presenter for Monday’s all-day seminar, “Contractual Risk Transfer,” and will also be presenting Workshop A, “Completed Operations Risks.” He is a partner in the law firm of Katz & Stone, L.L.P., with offices in Vienna, Virginia; Washington, D.C.; and Rockville, Maryland. The firm specializes in resolving construction disputes. He has extensive experience in representing owners, contractors, and designers in complex construction litigation. Mr. Katz is a member of the Bars of the District of Columbia, Virginia, Maryland, United States Supreme Court, and United States Claims Court. In addition, he serves as an arbitrator on the American Arbitration Association’s Construction Industry Arbitration Panel. Mr. Katz lectures and speaks frequently to owners, contractors, public building officials, subcontractors, suppliers, design professionals, sureties, and others involved in construction, on such topics as construction risk management, negotiating construction contracts, construction claims and claims prevention, liability of the design professional, and construction insurance issues. Mr. Katz has also written books on topics of interest to the construction industry, such as Construction Claims in Virginia, Construction Law for the Design Professional, and Virginia General Conditions for Public Projects, published by the University of Virginia, and Construction Lien Law in Virginia, Maryland and the District of Columbia and Negotiating, Interpreting and Administering Construction Contracts, published by Professional Education Systems. Mr. Katz has spoken to Associated General Contractors of America conventions on the subjects of “When Not To Abandon the Job” and “Nurse Him or Curse Him: Facing Subcontractor Default.” A repeat Construction Risk Conference speaker and recipient of IRMI’s Words of Wisdom (WOW) award, Mr. Katz has also conducted seminars for such construction trade associations as Associated Builders and Contractors; National Utility Contractors Association; American Subcontractors Association; Associated General Contractors of America; American Institute of Constructors; Virginia Utility Contractors Council; Heavy Construction Contractors Association; Plumbing, Heating, Air-Conditioning and Cooling Contractors Association; Contractors Association of West Virginia; Virginia Building Material Association; Maryland General Contractors Association; Construction Management Association of America; Fabricating Manufacturers Association; Virginia Roofing Contractors Association; National Association of Surety Bond Producers; Reliance Insurance; The St. Paul Companies; Bermuda Contractors Association; American Contractors Insurance Group; Center for Aviation Research & Education; Barbados Association of Quantity Surveyors; Korean Contract Management Association; and China National Petroleum Corporation. Mr. Katz holds both juris doctor and a bachelor of arts with distinction degrees from the University of Virginia.

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.... Definition......... d.. CRT–26 II...... Duty to Defend...... 5. CRT–18 State Statutes Which Limit or Void Indemnification Clauses ................................ CRT–25 a... CRT–29 1.CRT–7 A Risk Management System ............ III.............................. CRT–14 4........................... C.......... CRT–30 Examples........... INDEMNIFICATION ......................CRT–8 A..... CRT–25 1........... CRT–26 Defense that mutual release and settlement agreement may bar a claim for indemnification . I............................... C....CRT–9 Common Law Indemnity ..CRT–7 The Construction Contract............. INTRODUCTION ................................. CRT–29 Subrogation .. Defense that indemnification clause is void and against public policy ..... CRT–26 The defense is available if the indemnity provision expresses a clear intention to limit indemnification liability to the stated limits of insurance provision........... WHAT INDEMNIFICATION IS NOT ......................... c....... CRT–27 F.... B....................... An indemnification clause can be drafted this way if the parties are careful........ Background ...... C............... b.. CRT–31 5 Gerald I.CRT–9 Contractual Indemnity .. CRT–12 Limited Form .... CRT–26 a................................ 3................ B.....TABLE OF CONTENTS CRT I.......... Defense that indemnification doesn’t extend to indemnitor’s ultra-hazardous activities/strict liability .... CRT–27 A.CRT–7 3......................... 2.......... CRT–26 A requirement of insurance is not indemnification ... Broad Form ... b....... Waiver of Subrogation ...... B........................ G...... CRT–29 Caveats . CRT–22 Potential Defenses to Indemnity........ Content . CRT–21 Other Relevant Differences Between States .... c.. CRT–26 Defense that indemnification is limited to contractually-required insurance coverage ..... E...... General Contract Law and the Interpretation of Indemnification Provisions ......... 2. CRT–11 1............ CRT–16 Rules of Strict Interpretation Applied Specifically to Indemnification Provisions ....... CRT–29 a............... CRT–26 Defense that final payment waives right to indemnification ......... CRT–29 Function ....... CRT–27 Insurance ......CRT–7 A..... Response: Incorporate Savings Clause .............. b.... D. CRT–11 Intermediate Form . H............ CRT–25 Operation of Other State Statutes...... CRT–10 Categories of Indemnification Clauses ...... Katz ..

... CRT–35 Incorporation by Reference Problems ................ CRT–38 Conflicting Provisions and/or Lack of Reciprocal Coverage Due to Ineffective Contract Negotiation. CRT–36 G.................. K....... CRT–39 Attorneys’ Fees.... F. DRAFTING INDEMNIFICATION PROVISIONS .......................... CRT–39 Duties of Indemnitor.............. E.............IV........ CRT–42 Gerald I............. C.... D.. CRT–35 Choice of Law....... CRT–37 Effect of Settlement .............. CRT–34 For What Period of Time Will the Indemnification Clause Remain in Effect?......... What Contract Terms Govern the Parties’ Rights ... CRT–33 Which Parties Are Covered .......................... I... CRT–40 J...... Katz 6 . H......... B........ CRT–32 A.... Table of Authorities.. Workers Compensation Problems .... CRT–32 What Work is Indemnified ......... ........................... Drafting and Administration.............. ......

also of Katz & Stone. To avoid inequities. define and limit its rights in accordance with its goals. increasing cost effectiveness and creating a good working relationship between contracting parties. The importance of the contract cannot be overemphasized. the contract serves as a framework of the law between the parties and will establish which party has assumed or negated a particular risk in connection with the project.P.P. in their contract.L. Smith. B.g.L. Definition Risk management refers to the art of identifying. L. *This article is coauthored by Stephen W. Risk management requires a systematic and practical method of dealing with both the predictable and unpredictable risks inherent in the construction industry. L. Katz . “Sources of Contractual Liability” I. Although the contract serves as the principal risk management vehicle. In the end. Katz* Katz & Stone. responding to and controlling project risk factors in a manner which best achieves the objectives of all participants. The Construction Contract Risk allocation in the construction industry is established by the construction contract. will assign the risks and liabilities to the party best equipped to manage and minimize them. Ideally. It involves the allocation or distribution of the risks inherent to a construction project between or among contracting parties. INTRODUCTION A. Contractual risk transfer is a form of risk management which has been employed for many years in the construction industry. risk transfer does not grossly or inequitably allocate all risk to one party. 7 Gerald I. all parties should come to the negotiating table with some idea of their risk management goals. The risks and responsibilities associated with a specific project must be clearly allocated within the contract. analyzing. parties must begin managing and minimizing risks long before the contract is signed. A Risk Management System 1. most contractors pay insufficient attention to the risk management process (e. If done effectively. but instead places risk upon parties according to their ability to control and insure against risk. the parties. The contracting process provides the vehicle for each party to negotiate. Additionally. Contract admin- 2. effective risk management typically generates positive results on a project by improving project performance. Unfortunately.CONTRACT RISK ALLOCATION CRT Gerald I. compare budget of estimating department versus dollars/investment allocated to training and maintaining cadre of risk management professionals). C..

schedule. uninformed or naive. may be defined as the obligation of one party (the indemnitor) to reimburse another party (the indemnitee) for the losses the indemnitee incurs or the damages for which it may be held liable. Prior to negotiation. Katz 8 . each party should assign at least one experienced person to identify contractual and extra-contractual risks. Their impact can be significant because indemnification often shifts the burden of loss or responsibility. Indemnification issues arise frequently in construction litigation. they don’t get. This paper focuses primarily upon indemnity provisions. Gerald I. and the amount of potential loss or gain. c.istrators must acquaint themselves with the risks they are to manage and develop specific risk minimization strategies. its probability of occurrence. differing site conditions and delay. Application of risk management system: The parties’ risk management strategies and goals should be reflected in the language of the contract. Effective risk management requires project management’s attention not only during the negotiating/contracting phase but throughout the entire project. Some basic risk management concepts are: • • • • • Public work—transfer risk to others. also known as an agreement to hold harmless. b. each party should quantify the impact a risk will have on the project cost. Contractual risk transfer in the construction industry is seen most frequently in contract provisions regarding indemnity. The risk manager must evaluate risk factors or characteristics of a risk such as the risk event. Private work—some owners are uninterested. Response system: Each party should develop a process for formulating risk management strategies—mitigation. Reciprocal contract provisions—minimize exposure to the risks assumed.” 3. d. Risk management typically involves the following functions: a. • Deflecting or transferring risks by contract is a common response ranging from total allocation of risk to another party or risk-sharing between two or more parties. from one party to another. consequential damages. quality and/or profit. The impact of possible risks can be controlled to the extent the risks are effectively identified and managed. Impact analysis: Since risks influence all aspects of a project. Parties should adopt the philosophy in the area of risk transfer negotiation that “if they don’t ask. Risk identification: Risk identification is the essential first step for a successful project. deflection and contingency planning. Mitigate risks by requiring and enforcing compliance with insurance provisions. Project managers should be educated regarding how risks can be managed by negotiating and drafting carefully considered and projectspecific contract provisions. sometimes completely. II. INDEMNIFICATION Indemnification.

1995). Corp.2d 115 (Nev. Ct. Welch Equip. 634 N. equitable indemnification is typically not available to a party who has been charged with or held liable for “active” negligence. Inc. common law) indemnity from the negligent person. Murray Equip. Ct.2d 588 (4th Dep’t.Y. The court held that the owner/general contractor did not have to prove the employer’s negli- • • • 9 Gerald I. the general contractor’s contractual right of indemnity against the subcontractor defeated the subcontractor’s contribution claim. Since that time. when a person.2d 134 (1994).Y. Court found that although Delaware recognizes an implied-incontract theory of indemnification. 1993)... Indiana: ROTEC. Converse Consultants.D. v. A subcontractor who settled a negligence claim sought contribution from the general contractor.E.e. Even today. The court noted that in the absence of any express contractual or statutory obligation to indemnify. In view of the express indemnification clause in the contract running from only one party to the other. The court held that a material issue of fact remained as to whether the tank stand manufacturer was entitled to indemnification from the tank manufacturer precluding summary judgment. New York: Gillmore v. implied indemnification is limited to situations in which no express indemnification exists. Inc. 1998). The court held that because contribution and contractual indemnity are mutually exclusive. however. Duke/Fluor Daniel. 930 P. If the fault of each party is equal in grade and similar in character. New York employment law made the owner/general contractor strictly liable for all workers’ injuries occurring on-site.2d 533 (Ind.. Below are several examples of cases addressing the issue: • Delaware: New Zealand Kiwifruit Marketing Bd.2d 464 (N. 825 F. seen in construction contracts. The owner/general contractor brought a thirdparty action against an injured worker’s actual employer for common-law indemnity. City of Wilmington. App.. v. 1993). CRT B. 36 Mass. Moreover.2d 938. is compelled to pay damages occasioned by the negligence of another. App. 221 A.S. 671 N. Div. Chemical tank stand manufacturer brought a third-party action against the tank manufacturer for indemnification for potential liability to the purchaser. Only where a party has been passively or secondarily negligent will equity impose liability on the party with primary or active negligence. A. Courts compare the qualitative fault of the wrongdoer and use their equitable powers to shift liability entirely to the more culpable party. 1997). 626 N. Supp.S. equitable indemnity is not typically available because courts consider that a party should not be permitted to base a cause of action for indemnification on its own wrong.. See Negroni v. the first contractual indemnity provision appeared in the AIA General Conditions. indemnification provisions were rarely. Massachusetts: Callahan v. if ever. he/she is entitled to equitable or noncontractual (i. and that provision shifted the risk of certain losses to the contractor. See Medallion Dev.E. the indemnification clause has become a widely-used tool to regulate loss distribution and spell out who ultimately pays for defined risks. 634 N. App. indemnification could not be implied to run in the other direction and the absence of a reciprocal provision was assumed to be clearly intended. The common law. or equitable. indemnification is generally not available where an express contractual indemnification agreement exists. Inc.. Del. 1180 (D.Y. Background Prior to the mid-sixties.J. Katz .A. Inc. v. In the mid-sixties. East 67th Street Owners. Common Law Indemnity Common law. an indemnification action will lie only where the party seeking indemnity is without actual fault but has been compelled to pay damages due to wrongful conduct of another for which he is constructively liable. 608. without fault on his/her part. had already developed its own rules for shifting the burden of losses.

Transfer the duty to defend. Transfer liability for damages and/or judgment. LEXIS 2609 (1997) (court concluded that a subcontractor’s agreement to indemnify a general contractor for loss “which arises out of or is in any way connected with the subcontractor’s ‘acts or omissions’ in the performance of its work does not require a showing that the subcontractor was at fault in causing the general contractor’s loss or that its performance was a ‘substantial’ or ‘predominating’ cause of the loss”). Katz 10 . 1997). The underlying concept for this risk transfer is to pass risk to another party who may be in a better position to monitor and protect against the risk or in a better financial position to accept and insure against the risk.. App. As such. The owner brought a third-party action against an injured worker’s employer for common law indemnity. indemnification provisions may: a. By allowing the transfer or distribution of risk. Showa Shipping Co.Y. denied. 1995). Thus. 2.S. 671 N. California: In California. 4th 500. v. Encourage compromise and settlement by reducing settlement discussions to bilateral negotiations. rev. Insurance plays a significant role in the indemnification process. the general contractor may assume the owner’s risks and subcontractors may assume the general contractor’s risks. • • C.2d 527 (Tenant Work Contract. Amtech Mechanical Services. Ct. Contractual liability insurance insures against the risk or liability assumed by virtue of hold-harmless or indemnification agreements. Contractual Indemnity Contracting parties normally utilize indemnification clauses to shift the risk of a variety of liabilities. therefore. Tennessee: Winter v. App. Ltd. due to imprecise negotiation. i.. because the promise to indemnify without a solvent indemnitor (or insurer) is worthless. See National Union Fire Ins. Inc. 1998).. 47 F. The court held that the owner was entitled to common law indemnification since there was no showing that the owner exercised control over the work site or the contractor’s performance. Smith.gence in order to obtain common law indemnification.e. • New York: Negroni v. Div.3d 316 (9th Cir. The general contractor was entitled to common law indemnity from the owner on the claims of unpaid suppliers. and. even an actively negligent party could conceivably obtain indemnity. App. the risk is placed upon the party most capable of cheaply insuring the risk. Rptr.W. Transfer risks from one party to another regardless of fault. Inc. indemnification clauses achieve the following: 1. Transfer or distribute the duty to insure.Y. 1997 Cal. but rather had only to prove its payment of the judgment in favor of the injured worker. a claim of equitable indemnity can be made for an amount equal to the proportional fault of the indemnitee. New York scaffold law imposes a non-delegable duty upon property owners for all workers’ injuries occurring on-site. encouraging adequate levels of insurance. 1995). owner’s liability was vicarious. which has adopted comparative negligence. In general. 61 Cal. See also Continental Heller Corp. For instance. The contractor and the owner had entered into an oral contract for the erection of an equestrian center. v. b. 914 S.2d 464 (N. 2d 668 (2d Dist. 53 Cal. The contractor was entitled to indemnification because the supplies enhanced the value of the property and it had not been paid for them at the time of its termination by the owner.. the cost of litigation. and allowing contracting parties to Gerald I. eventually disagreed about project costs and the scope of work. c. Co. East 67th Street Owners.

Katz .2d 849 (1994). The court found the indemnity provision “sufficiently comprehensive” and “clear and certain in its terms” so as to include the indemnitee’s own negligence.D. v. • Arizona: Hauskins v. 53 F. or will simply not enforce it. (2) the agreement must result from an arm’s-length transaction between parties of equal bargaining power. because of its exculpatory nature to the indemnitee and onerous consequences to the indemnitor.. Corp. Inc. the exculpatory nature of indemnity clauses has given rise to controversy and claims that the clauses are contrary to the common law principle that each party should be responsible for its own wrongful acts. App. Also. by itself.allocate the burden of defending claims. 1999). 1. Doing so. and limited form–provide a spectrum of risk-shifting options.. CRT Parties should note that the indemnification clause does not release the indemnitee from liability. However. See Dalton v. by including a mandatory insurance provision. Rather. 867 P. this type of clause serves to transfer the entire risk of loss away from the indemnitee and onto the indemnitor.. Specifically. Georgia: Federal Paper Bd. “the parties intended to shift the risk of loss under the con- • • 11 Gerald I. The majority of states prohibit this clause by statute. 279.. 2d 1361 (N. 42. 852 P. It is important to distinguish between “own” negligence and “sole” negligence. the court held that. The three main types of indemnity provisions–broad form. and the courts actively enforce those statutes. intermediate form. Therefore.C. When enforced. an agreement to indemnify a party for its own negligence must fulfill three conditions: (1) the parties must express their intent to exculpate in unequivocally clear language. 1996). D. The party claiming indemnification has the burden of proof as to the type of indemnification clause. forty-two states have anti-indemnity statutes that void indemnity provisions in construction contracts which attempt to indemnify the indemnitee for its sole negligence. The court held that an indemnification provision appeared to require indemnity for the indemnitee’s own negligence and thus. An indemnity agreement will not be interpreted to indemnify against the indemnitee’s own negligence or wrongdoing unless that provision is expressly provided for within the indemnification agreement in clear and unambiguous terms.. Supp. In fact. 189 W.2d 1226 (Ariz.2d 647 (D. v. Maryland Drywall Co. Broad Form. Georgia courts are required to “construe the indemnification provision together with the insurance provisions” of the contract. 673 A. and (3) the exculpation must not violate public policy.M. Those states which permit the application of broad form indemnification clauses typically require that the parties express their intent to establish that level of indemnification by using clear and unequivocal language. even if that liability is due to the indemnitee’s sole negligence. 175 Ariz. McGillicuddy. Inc. 177 Ariz. Inc. Inc. would violate Georgia’s anti-indemnity statute. Schlosser Co.E. 1992). 432 S. Ga. Harbert-Yeargin. An indemnity agreement will not be interpreted to indemnify against the indemnitee’s own negligence unless the court is firmly convinced that the interpretation reflects the intention of the parties. Categories of Indemnification Clauses Determining the type or scope of the indemnification clause at issue is a major source of litigation. Co. Ct.Va. District of Columbia: W. the real question in today’s construction industry is what will the courts allow— what is legally permissible when drafting indemnification provisions? The answer lies in contract interpretation and individual state law. it simply allows the indemnitee an economic avenue of recovery from the indemnitor. as discussed below..2d 98 (1993). Childress Serv. review denied. The indemnitor assumes any and all liability regardless of fault. 428.

Inc. 714.E. the indemnitor assumes any and all liability except that which is due to the indemnitee’s sole negligence/fault. The court found the language clear and unambiguous and determined the intention of the parties and unequivocal terms in the indemnity provisions clearly indicated that the contractor would indemnify the owner for injuries arising from owner’s negligence.S. This language was held sufficiently plain and unambiguous. App. Katz 12 . Ct. Intermediate form indemnity imposes liabil- Gerald I. An indemnity agreement will not be interpreted to indemnify against the indemnitee’s own negligence in the absence of “clear and unequivocal language. Tennessee: Olin Corp. a party may contract to indemnify another for the other’s own negligence.. • • • • • 2. Super. Intermediate Form.” As a result. The court held that. v. 1028 (1996). broad form indemnification clauses “are strictly construed and will not be held to provide indemnification unless it is so stated in clear and unequivocal terms.” Any limiting language or specific references to the actions of the indemnitor can defeat a broad form agreement. Roebuck & Co. Sears.. cert.. 1994).. Inc. Ct.2d 632 (Okla.2d 390 (Ind. denied. 2000). Green Construction Co. Co. v.2d 39 (Pa. actions. Oklahoma: Wallace v. under Indiana law. 195 W.” Pennsylvania: Bethlehem Steel Corp.3d 765 (5th Cir. the court found the anti-indemnity statute inapplicable. because it satisfied the rule that intent to indemnify the indemnitee’s own negligence be “unequivocally clear. Co. Sherwood Constr. Yeargin. Va.. and its bond contained even broader language covering losses from any cause whatsoever concerning construction of the road. 877 P.” Mississippi: Martin v.tract to insurance and did not intend. for [indemnitor] to bear the risk of loss for any accidents occurring due to the sole negligence of” indemnitee. Ct. West Virginia: VanKirk v. The court noted that express language such as “including indemnitee’s acts of negligence” would have been sufficient under Tennessee law. Language in the contract obligating indemnification from all losses arising out of performance of the subcontract “regardless of whether such … loss is incident to or arises out of conditions or omissions permitted or acts performed by an indemnitee” supported recovery of damages caused in part by the indemnitee even though indemnitor was completely without fault. An indemnity agreement will not be interpreted to indemnify against the indemnitee’s own negligence in the absence of clear and unambiguous language. Here. 518 U. 1994).2d 782 (1995). 1997). it must be clear and unambiguous from the language of the contract that this was the intention of the parties. Long Elec. 466 S. • Indiana: Hagerman Const. MATX. and the contractor was obligated to indemnify the State Department of Highways for economic losses arising from the contractor’s failure to coordinate its work with other contractors. and thus enforceable. or claims of any character” arising from its operations. 1998). Although Tennessee law permits a party to be contractually indemnified for its own negligence. Corp.3d 398 (6th Cir. 741 N. 146 F. The court found that the parties did not clearly and unequivocally express an intent that the contractor would indemnify the owner for the owner’s own negligence and the court would not impose its opinion as to the proper interpretation of the indemnity agreement.E. 703 A. As a result. App. under the indemnification agreement. A general contractor’s contract contained language expressing its agreement to hold the State Department of Highways harmless “from all suits. v. 24 F.. but “this may only be done if the party knowingly and willingly agrees to such indemnification.

Michigan statutory law prohibits construction contract indemnity clauses that insulate indemnitees from the consequences of “their sole negligence. Accordingly. Co. Thus. Katz . 1997). Certainteed Corp. or breach of contractual obligation.. Where the indemnity provision required the contractor to indemnify the owner even for owner’s own acts of negligence. the court found that the subcontractor was required to indemnify the contractor for damages arising from an injury to subcontractor’s employee resulting from negligence of the employee (49% negligent) and the contractor (51% negligent). Ct.. 1996). 1996). regardless of whether they were also caused in part by the contractor. 1501 (D. Kan. Super.2d 899 (La. 667 N. if the injury were caused “at least in part” by the indemnitor. 1995). Park Steel Corp. 635 N. Ct. some degree of fault must be attributable to the indemnitor. contractor was required to indemnify and defend the owner and the owner’s agent (the construction manager) in action by contractor’s employee injured as a result of owner’s and construction manager’s alleged negligence. • Kansas: Dixon v. Where the indemnity provision required the subcontractor to indemnify the contractor for all claims caused in whole or in part by a negligent act of the subcontractor or its employees.” this was held to constitute an intermediate. App. but would have no liability if totally without fault. 1996). Damon G.D. Co.. 593. Massachusetts: Collins v. be it 1% or 99%. Michigan: Sherman v. the indemnitor would be liable on the claim. neglect. the court found that the subcontractor was required to indemnify the general contractor for damages arising from an injury to sub-subcontractor’s employee resulting from negligence of the sub-subcontractor (37% negligent) and the general contractor (63% negligent).J. v. Kiewit Const... so long as the losses were not caused by the sole negligence of the owner. Massachusetts: Erland Const. Where the indemnity clause required the subcontractor to indemnify the general contractor on account of acts or omissions of any employee of subcontractor. Div. 944 F. 203 Mich. DeMaria Bldg.2d 953 (Mass. Inc... Where the indemnity provision expressly bound the subcontractor to indemnify the owner and the contractor for injury resulting from the negligence of a sub-subcontractor. Inc. Inc. without regard to the indemnitee’s degree of fault. Ct. Where the indemnity provision concluded with a clause obligating the indemnitor to indemnify the indemnitee for damages arising out of indemnitor’s own “fault. Supp. App. Co. Louisiana: Wolfe v.Y. Canal Marine Repair. Ct.2d 904 (Mass. 660 So. This type of clause excludes only actions where the indemnitee is solely at fault. A.E.2d 888 (N. 671 N.Y. the court found that the subcontractor was required to indemnify the general contractor who was 97% at fault for injury to subcontractor’s employee (who was the remaining 3% at fault).2d 187 (1994). and have held that intermediate form agreements do not violate the anti-indemnity statute. App. however. The court found the anti-indemnity statute inapplicable as the indivisible injury was caused by the concurrent negligence of the general contractor and the employee. Douglas Co. 4th Cir.E. Wal-Mart Stores. App.ity on the indemnitor for its sole negligence as well as for the joint negligence of itself and the indemnitee. 513 N.S.2d 1209 (N. New York: Malecki v.” Michigan courts uphold indemnity agreements. App. not broad form indemnification obligation. New Jersey: Leitao v. 693 A..W. 1995): An indemnification clause obligating the subcontractor to indemnify the general contractor for claims “caused in whole or in part by any negligent act or CRT • • • • • • 13 Gerald I.

finding that because the clause did not explicitly indemnify Metra for its own negligence and because Metra was seeking indemnification for costs and judgments resulting from the contractor’s negligence. holding that the provision unambiguously provided that the contractor “will be responsible for its and/or its subcontractors’ proportionate share of liability for an injury. 2. 4th 1484. Ill. 1999). however. In other words. The contractor had agreed to indemnify the owner for damages and injuries “to the extent caused by or arising out of the negligent acts or omissions of [the contractor]. remanded. 4518 Assoc. Provisions purporting to hold a party harmless “in any suit at law. Contractor sought to dismiss a third-party action by Metra based on indemnification..S. 27. 143 N.” There is. The indemnitor assumes liability to the extent of its own negligence or fault. servants or employees whether or not such actions or omissions occur jointly or concurrently with the negligence of” the owner. the clause reiterates the rights already available to a would-be indemnitee. the indemnification clause was valid and Metra could maintain its third-party action against the contractor.Y.. LEXIS 13453 (E. . Div.” The court. and aff’d. 1992). 11 Cal. Sept. 1999 U. The owner argued that the “whether or not” clause entitled the owner to indemnification for its own negligence in all cases where the contractor was itself negligent. 10 Cal. Dist. Inc. LEXIS 4001 (N.2d 726 (1995).D.” “rom all claims for damages to persons. cert. . Limited Form. regardless of [the owner’s] own negligence. 140 N. • Illinois: Biedzycki v.” The court refused to find the clause void under the anti-indemnity statute. • California: Peter Culley & Assoc. 1998 WL 150724.J. Katz 14 . Super. App. modified. Superior Court.J. Inc.” and “from any cause whatsoever. v. cost and expense . 4th 1206E (1st Dist..Y. 675 A. The limited form indemnity is thus a restatement of the common-law principle that one should be held liable for only those circumstances over which it exercises control. The court found that the indemnification clause in the parties’ contract was enforceable since it did not impose an obligation to indemnify for negligence other than that of the indemnitor and its agents. Northeast Illinois Regional Commuter Ry. Rptr. are considered limited form. 278 N. 13 Cal. especially where an issue of fact was unresolved as to whether the indemnitor’s negligence caused the underlying loss. 326.2d 859 (N. 1995). Brown & Root Braun.D. 1998). Pennsylvania: Sun Co. liability. J. 672 N. . “no basis in law or common sense for [the owner’s] position • • • Gerald I. App. An indemnity clause that stated indemnitee agreed “to hold indemnitor harmless from any and all responsibility or damages … arising out of the construction of the Work and against any judgments—obtained … with respect thereto” was held to support a reading that only the indemnitee’s negligence or the indemnitor’s passive liability as property owner was also covered. Div.” without expressly mentioning an indemnitee’s negligence. its subcontractors. otherwise known as comparative fault.S.2d 209 (1996). . whether or not such claim is caused by or attributed to the condition of any premises owned or occupied by Metra. the court held. reh’g denied.S. & Developers. Mar. New Jersey: Carvalho v.omission of [subcontractor] or anyone directly or indirectly employed by [it] or anyone for whose acts [it] may be liable” was not entirely invalid under New York’s anti-indemnity statute. 1998). agents. Toll Bros. New York: Narvaez v. 651 A. The indemnity clause at issue required the contractor to indemnify Metra from “all loss. Corp. granted. 451. 565. without regard to the seemingly limiting phrase “to the extent. 1992). denied the owner indemnification for its own negligence. App. 658 A..2d 624 (1st Dist. Dist. 1998 U. 3.2d 492 (App. Pa. v. on account of all claims .

Such obligation shall not be construed to negate. Managers. disease or death.2d 722 (Mo.3. 858 P. App. A201 clearly provides that indemnification applies only to the extent the claim is caused by the negligent acts or omissions of the contractor or a party for whom it is responsible. damages.18. and agents and employees of any of them from and against claims.. loss or expense is caused in part by a party indemnified hereunder. or reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this Paragraph 3.” the contractor was not required to indemnify the city for the city inspector’s negligence which caused injury to the contractor’s employee while the employee was working on a city project. loss or expense is attributable to bodily injury. Katz . The court stated that indemnity contracts should be construed to give effect to the parties’ intentions. App. arising out of or resulting from performance of the Work. damage. AIA A201 Indemnification Provision. abridge. Parties may provide for comparative negligence in an indemnity • • 15 Gerald I. materialmen or employees. sickness. 208 Mich. damage. loss or expense is caused in part by a party indemnified hereunder” indicates that the contractor’s indemnification responsibility applies even though the owner’s own negligence may be a contributing factor. 884 S. Boyer Washington Boulevard Assocs.1 of the current 1997 edition of AIA Document A201 provides: To the fullest extent permitted by law and to the extent claims.18. Perhaps the best known and most widely used limited form indemnity provision is found in the AIA General Conditions. (Emphasis added). 1994). An injured worker brought an action for negligence against the construction manager.1 entitled it to “full” indemnification. Article 3. a Subcontractor.W. AIA Document A201. Architect’s consultants.W. its agents. damage.2d 995 (Utah 1993). Inc. The construction manager in turn brought a third-party action against the subcontractor who supplied the steel beams involved in the accident. 856 P. 340. Missouri: Dillard v.that the phrase ‘whether or not’ alters the common sense and judicially determined meaning of ‘to the extent’ to read ‘to any extent. regardless of whether or not such claim.18. The fact that indemnification applies “regardless of whether or not such claim.’” CRT • Utah: Ericksen v. anyone directly or indirectly employed by them or anyone for whose acts they may be liable.2d 79 (1995). subcontractors. the Contractor shall indemnify and hold harmless the Owner. or to injury to or destruction of tangible property (other than the Work itself) but only to the extent caused by negligent acts or omissions of the Contractor. 527 N. Corvo Iron Works. Shaughnessy.. the following are examples of application of the 1987 edition of A201’s indemnity provision which also uses the phrase “but only to the extent”: • Michigan: MSI Constr. Architect. including but not limited to attorneys’ fees. and claimed that AIA A201 Article 3. losses or expenses are not covered by Project Management Liability insurance purchased by the Contractor in accordance with Paragraph 11. v.2d 352 (Utah 1993). losses and expenses. provided that such claim. While courts have not yet had the opportunity to interpret the 1997 edition. Salt Lake City Corp. damages. Fickel & Scott. Where the indemnity provision only applied to “claims arising out of acts by the contractor. and that the words “to the extent caused in whole or in part” obligated the subcontractor to indemnify the construction manager only to the extent that the award was attributable to its own negligence. Accord Brown v.

Co.... 2000). LEXIS 1818 (1998). Super.2d 455 (Tex. and where the indemnification clause specifically and unambiguously stated that the general contractor would indemnify architects and engineers for that portion of damage caused by general contractor or its subcontractor.3d 795 (7th Cir. 1. Ct.. 1998 WL 376344. 1998 Consoc. courts will try to enforce the contract as written in order to give the parties the benefit of their bargain. Under Massachusetts law. • Illinois: Church v. v. and give terms their generally prevailing meaning. See also Hagerman Const. General Motors Corp. 741 N. • Connecticut: Fire Systems. Pa. wholly or partially. Pennsylvania: Richardson v.” but does not clearly and unequivocally apply to indemnification of the indemnitee by the indemnitor for the indemnitee’ own negligence. considering all relevant provisions. General Contract Law and the Interpretation of Indemnification Provisions When interpreting indemnification provisions. R. Supp. Semac Elec. which is closely similar to the language used in AIA Document A201. Katz 16 . 1994). Inc. Courts will construe the plain language to determine the true intent of the parties. Atchison. parties must keep in mind the following general principles when negotiating and drafting indemnification provisions. Lewis/Boyle. 1993).. are construed to effectuate the contracting parties’ intent as manifested from the contract’s plain language and in light of the situation of the parties and the circumstances connected with the transaction. 74 F. e. courts apply certain general principles of contract law. The provision as written was not a “sole negligence” provision and would not be construed as such. As a basic premise. Massachusetts: Nguyen v. 890 S. I. As a result. 1995). The owner’s contract with an agent hired to sell the owner’s heavy equipment obligated the agent to indemnify the owner for loss resulting from the agent’s activities Gerald I. Applying a two-step analysis to the A401-based indemnity clause to determine whether a subcontractor had knowingly and willingly agreed to indemnify the general contractor for its own negligence. a contract of indemnity is “fairly and reasonably construed in order to ascertain the intention of the parties and to effectuate the purpose sought to be accomplished”).contract. App. • Texas: Houston Lighting & Power Co. Inc. Kennedy Memorial Hosp. 979 (E. hold-harmless and insurance provisions.. Long Elec.g. but must expressly state their intent to do so in the agreement. Parties may provide for comparative negligence in an indemnity contract. 58 (D. v. like any other contracts. Corp. Supp.E. by a negligent act of the subcontractor without regard to whether the injury was caused in part by the contractor’s negligence. general contractor was required to indemnify architects and engineers. • E.D. v. 899 F.” • • 2. Courts will construe the agreement as a whole.2d 390 (Ind. The court applied Kansas law in reaching its decision. The court interpreted an indemnification provision based on that in AIA Document A401. C ourt held that “express indemnity contracts.. The court read the indemnity provision between the contractor and subcontractor to clearly and unambiguously provide that the subcontractor agreed to indemnify the contractor for claims for injuries which were caused. the court determined that the clause “clearly and unequivocally … applies to negligence.W. Topeka & Santa Fe Railway Co. John F. 838 F. 1996).

The court held that the broad form language covered “gross” negligence since it was to be assumed that the term “negligence” showed the parties’ intent to provide indemnity for “all shades” of negligence. Where it was unclear whether or not an indemnification agreement extended to losses incurred by the “managing party” of a joint-venture indemnitee. L & R Constr. 1380 (D. Co. 1560 (D. 1997) (court noted that the inclusion of the subcontractor’s duty to obtain general liability insurance in the indemnification clause indicated the parties’ intent that the duty to indemnify would remain in effect only while the work was in progress). Subcontractor agreed to indemnify the general contractor from liability for its own negligence and agreed to provide contractor with insurance coverage for “all damages” to “all persons.or the activities of the agent’s “contractors.3d 1194 (3rd Cir. Utah 1994). 1995). 556 N. whether employees or otherwise” and “in any manner connected” to the work of the subcontract. 1995). App.2d 457 (Tex. The court could not determine whether an indemnification provision covered an equipment lessor’s negligence occurring only during the lease term or whether it also covered its negligence for periods prior to the execution of the lease. Additionally. Ct. • 17 Gerald I. the court held that because ambiguous indemnity contracts are to be construed strictly against the party asserting the contract. Kasler Corp.. Minnesota: Van Vickle v.. Inc. Katz . 567 N. Supp. the failure of the subcontractor to acquire the insurance required under the subcontract made the subcontractor liable for not only the claim. Mid-America Constr. Ct. 899 F. • 4.2d 238 (Minn. v. 842 F. The jury found the general contractor liable for gross negligence. The court refused to grant summary judgment to the indemnitee and held that evidence would have to be taken to establish the parties’ intent as to the scope of time subject to indemnification. the requirement for the subcontractor to provide specific insurance coverage for the benefit of others converted it into an enforceable agreement. v. the court admitted parol evidence as to the intention of the parties. R.2d 667 (Iowa Ct. Because the language was ambiguous. 44 F.W.W. 911 S. Courts will enforce the indemnity provision against the drafter of the agreement where ambiguity creates two or more reasonable constructions. Courts will allow the admission of parol evidence where the intent of the parties is unclear. I. 1996). the appeal and accrued interest. 58 (D. Co. amended on recon.. no duty to indemnify could be found and the managing party could not recover indemnity..W. the indemnification action. Utah 1994). CRT • 3. App. • Massachusetts: Nguyen v. App. thus the owner was left with no right to indemnification. Supp. Lawson-Avila Constr.. 855 F. and the general contractor sought indemnification from the subcontractor.. Lewis/Boyle. • Iowa: Campbell v. 1995).. Texas: Webb v. The court held that while the indemnity agreement standing alone would not be enforced in Minnesota.W. Inc. Supp. Co. in which a steel erection crane overturned causing serious injury and fatality. Utah: Salt Lake City Corp. but also for attorneys’ fees and costs paid by the general contractor to defend the original action. C. Scheurer and Sons.” The loss in question was caused by the contractor employed by the buyer of the equipment and the court would not expand the meaning of “contractors” to include the buyer’s contractors. • Pennsylvania: Kiewit Eastern Co. The court could not determine from the four corners of the agreement what the parties intended.

Delaware: New Zealand Kiwifruit Mktg. 1. Typically. Inc. The contract between the authority and the security company required that the company indemnify the authority against any liability arising out of intentional or negligent acts or omissions of the company. including death. intent to indemnify must be expressed and will not be implied. in a commercial setting.2d 477 (D. v. Noting that “[a]bsent clear and explicit language.” the court held that the indemnity provision. in view of the express indemnification clause in the contract running from only one party to the other. Super. courts strictly construe indemnification provisions to require that an intent to indemnify another against its own negligence must be expressed in clear and unequivocal terms. City of Wilmington. • • • • Gerald I. Although indemnity agreements are not against public policy. District of Columbia: Grunley Const. the parties would be held to their bargain. courts apply some additional rules of interpretation to indemnification provisions. e. Supp. This factor may lead to inconsistent results within and between the states. Inc. 18 (N. the general rule holds that unless “expressly and clearly indicated” in the contract language. • Connecticut: Fiorello v. indemnification could not be implied to run in the other direction. Co. 1997). Unlike certain other contractual duties in construction.. Del. As a result. indemnified the contractor for its own negligence. Standard Chlorine of Del.5. Rules of Strict Interpretation Applied Specifically to Indemnification Provisions Some states abide by the legal principle favoring freedom of contract between parties of equal bargaining position and will enforce any indemnity agreement if the intent is clearly stated..2d 403 (Del. Delaware: Precision Air. 1993). Lyles. The court found that. the housing authority cross-complained for indemnity against the independent security company which had contracted with the authority to provide security services. based on the language of the indemnification agreement drafted by the indemnitor. duty to schedule and coordinate the work or duty to cooperate. 1997 WL 781829. 1997 Consoc. 839 F. Ill.D. The court found that. arising out of or resulting from or in connection with the execution of the work.. However. Where the indemnity clause required that the subcontractor “indemnify and save harmless contractor and owner from any and all damage and personal injury. LEXIS 3254 (Dec. As a result. 1995). the word “all” left no room for exceptions. v. Conway Corp. an indemnity contract will not be construed to indemnify one against his or her own negligence. the courts will not delve too deeply into the fine points of bargaining power.g.. Illinois: Smith v. Bd. Universal Builders Supply Corp. others wrestle with the inequities imposed on the public at large by the broad or even intermediate form of indemnity. 676 A. 654 A.C. an indemnitee cannot indemnify itself for its own negligence. 825 F. it had clearly intended to indemnify the indemnitee for “all” negligent acts. Katz 18 . The court found that in its ordinary and natural meaning. In an action arising out of the shooting of a minor by a security guard at a housing development. Courts may look to the relative bargaining positions of the parties when enforcing an exculpatory clause. 1993).” but did provide indemnity for the authority for its own negligence where the alleged negligent acts or omissions were in hiring. as a matter of law.. v.” the court found that the indemnity provision “did not manifest intent to provide indemnity for every act occasioned by the company’s performance. 1180 (D. 1996). Supp. 8. F. supervising and training employees of the security company.

275 Montgomery County Circuit Court. Noting that “[i]ndemnity provisions are not read with any bias in favor of the indemnitor and against the indemnitee. Katz . presumption is that parties do intend to indemnify indemnitee’s own negligence. 1994). and the general contractor was not entitled to indemnity. Under Louisiana law. Co. the clause must state that it applies to indemnification of the indemnitee … by the indemnitor … for the indemnitee’s own negligence. no “clear and unequivocal” intent to indemnify against a party’s own negligence was demonstrated. Inc. Montana: Slater v. The general contractor sought contractual indemnity from the subcontractor. arising out of the electrical subcontractor’s work. subcontractor.2d 829 (1993). cert. 715 (D. but the court held that state law imposed a “nondelegable” duty to provide fall protection on general contractors. successful or not. Maine: International Paper Co. The general contractor was held partially liable for failing to provide proper scaffolding which resulted in injury to the subcontractor’s employee.. and the subcontractor filed a cross-claim alleging that the contract obligated the operator to defend and indemnify the subcontractor.2d 17 (La. 1993). Because indemnity provision did not specifically provide indemnity for liability under the state scaffolding law.” the court held that the language of the indemnity provision was very broad and required a twofold obligation to indemnify the general contractor against any liability for judgments resulting from the electrical contractor’s work and to assume the cost. Ct. 649 So. 100. Oil well operator’s employee brought a personal injury action against operator. App. 912 P.2d 390 (Ind. The court found that the contract clearly obligated the operator to indemnify the subcontractor even though the subcontractor breached the insurance provisions of the subcontract by failing to have the operator named as an additional insured. Co.• Indiana: Hagerman Const. 616 N.E. Me. v. 1993). Corp. A&A Brochu.. The court upheld the buyer’s right to indemnification from the seller in an action by seller’s employee for injuries resulting from the buyer’s negligence since courts will honor clear reflections of mutual intent. Lou Ana Foods. 899 F. electrical subcontractor. the court found the subcontractor was not obligated to indemnify the general contractor for its own negligence. 266. 624 So. 3d Cir.E. App. v. NL Industries. 618 So. Ct. Ct. and others. 1995). The subcontract obligated the electrical subcontractor to indemnify the general contractor for any claims “made or asserted” in connection with the subcontractor’s work...” Because it found that the indemnity provision met step (1). where court stated that in contracts of indemnity intent to indemnify indemnitee’s own negligence can be taken from contract as a whole. CRT • • • • • 19 Gerald I.2d 780 (1996). including legal fees. Negligence and breach of contract action was brought against the general contractor. App. Long Elec. Turner Constr. and engineer for damages resulting from an electrical fire at plaintiff’s hotel. Co. denied. of defending the general contractor against any claim. Louisiana: Spell v. Massachusetts: Urban Investment & Dev. Louisiana: McGoldrick v. 741 N.2d 1224 (La. Inc. Supp. The court applied a two-step analysis to determine whether a subcontractor had knowingly and willingly agreed to indemnify the general contractor for its own negligence: (1) “the indemnification clause must expressly state in clear and unequivocal terms that negligence is an area of application where the indemnitor … has agreed to indemnify the indemnitee. but not step (2). Ct. 35 Mass.2d 455 (La.. v. App. 2000).” and (2) “in clear and unequivocal terms. An indemnity provision expressly obligated the seller of lumber to indemnify the buyer for losses caused by the buyer’s own negligence. Central Plumbing & Heating Co.

Ct. The court found that the contract explicitly contemplated such claims. Gas pipeline operator brought an action seeking reimbursement from royalty interest owners of that portion of the royalties attributable to overcharges reimbursed to customers. Utah courts follow a rule of strict construction requiring that the intention to indemnify another party for its own wrongdoing be clearly and unequivocally expressed. Under Utah law.3d 10 (2d Cir. Inc. Owner and contractor were found jointly liable for the unauthorized use of a patented design for gas separation in a newly constructed gas processing plant. 846 S. Katz 20 . Supp. The court stated that if the parties intended to include. and the indemnification clause did nothing more than allocate to the contractor the cost of purchasing insurance to cover the risk. pursuant to the contract. v. Where contractor agreed to assume risk of injury to employees connected with security services provided by contractor and indemnify and hold the landowner harmless from any and all loss. Emscor. Under New York law. aff’d. American Asbestos Control Co.• New York: Olin Corp. Employee of an asbestos removal company fell through a negligently maintained roof on city property. Simpson Paper (Vermont) Co. 629 A. 1997). 1993). Parties should be able to rely on the terms of an agreement arrived at after arduous negotiations. Inc. 858 S. a provision that covers losses due to the indemnitee’s own negligence. 1996). within the scope of their indemnity agreement.. 824 F..” Texas: Man GHH Logistics GMBH v. 1993). they must do so in clear and unequivocal language. indemnity and release provisions contained in agreements entered into in connection with the sale of a hazardous waste site were broad enough to require the buyer of the site to indemnify the seller for CERCLA liability. Court enforced purchaser’s agreement to indemnify seller in view of unambiguous contractual language. 5 F. 1532 (D. However. Commission.. contractor would be required to defend and indemnify landowner against claims by contractor’s employee. the parties had an arm’s length business deal. In its suit against the contractor for indemnification.2d 86 (Vt. and the presumption is against any such intention and it is not achieved by inference or implication from general language.W. but the court held that the indemnity provision lacked the requisite express language of the parties’ intent to indemnify the city for its own negligence.3d 431 (10th Cir. Consolidated Aluminum Corp. as the indemnity clause contained general language and did not expressly provide that the parties intended to indemnify the operator for its own wrongful conduct.W. Gulsby Engineering. 702 A. The city.” Pennsylvania: City of Pittsburgh v. Utah: CIG Exploration. within the four corners of the contract. Vermont: Hamelin v. Texas: Tenneco Oil v. No inference from words of general import can establish such indemnification. App. App. we are unwilling to ignore the broad inclusive language of the agreements freely entered into by two sophisticated parties. 83 F. The court stated that “this is a seemingly harsh result for a company that must pay for the cleanup of contamination that it apparently did not cause.2d 599 (Tex. 1993)..2d 41 (Tex. the court granted the owner summary judgment based upon finding the intermediate form indemnity provision in their contract unambiguous and “susceptible to only one reasonable meaning. 14th Dist. Hill. the gas pipeline operator was not entitled to indemnification from the royalty interest owners pursuant to the indemnity provision. • • • • • Gerald I. sought indemnification for the claims made by the injured employee. notwithstanding that the provisions predated the enactment of CERCLA.2d 265 (1993). Utah 1993). Ct. 235. The “express negligence rule” requires that parties seeking to indemnify the indemnitee from the consequences of its own negligence must state that intent in specific terms. v. 157 Pa. even if his injuries were caused by the landowner’s own negligence.

2d 1271 (Alaska 1994).S.3d 1312 (7th Cir.. Katz .. The indemnification clause in the subcontract had been modified with the words “Subcontractor is not responsible for others who are not in conformance with OSHA. Illinois: In both Tanns v. either public or private. … [and] the contract is ambiguous on the issue of indemnifying the negligence of the indemnitee. stating that a “contract need not expressly relieve the indemnitee of its own negligence if the words of the agreement clearly import that intent. Norfolk & W. When a construction worker was injured falling from a negligently secured ladder. in Illinois. Ringland-Johnson-Crowley Co. • Iowa: Herter v.D. Illinois: Field v.” G. CH2M Hill Northwest. As a result. In conjunction with strict construction.W. 628 A. 873 P.2d 631 (D. Employee of a masonry subcontractor. it should be noted that “clear and unequivocal” does not necessarily mean “express”.E. State Statutes Which Limit or Void Indemnification Clauses Again. the statute that prohibits indemnity provisions that insure against indemnitee’s own negligence also prohibits clauses which purport merely to limit a party’s liability to a sum certain. and many of these same states also limit intermediate form indemnity. the project’s sheet metal contractor argued that the indemnification clause in its contract with the general contractor did not clearly and unequivocally impose an obligation to indemnify the general. However.” The court found that the modification rendered the indemnification provision ambiguous and held that “where a party purports to have the right to indemnify for its own negligence. … there is no indemnification for the indemnitee’s own negligence. App. 1997). • Alaska: City of Dillingham v. and Turner/Ozanne v. Under Alaska law. promise or agreement to indemnify another person from that person’s own negligence. Borenstein and Co. The court found that the indemnification clause in a service agreement between the railroad and an electrical contractor violated the Illinois Construction Contract • • 21 Gerald I.2. 1997). LEXIS 19261 (N. the courts confirmed that. Forty-two states with anti-indemnity statutes disallow indemnity based on broad form indemnity. as well as a subcontractor’s agreement to indemnify a contractor for the contractor’s own negligence. Courts routinely enforce the terms of the anti-indemnity statutes and void indemnity provisions that are contrary to the applicable statutes. was killed when he fell through a hole created by the roofing subcontractor which was an OSHA violation.C. Ben A. a contractor’s agreement to indemnify an owner for the owner’s own negligence.2d 667 (Ill. which prohibits in a contract or agreement. The statutes are not based on any uniform law. courts often find that ambiguity on the issue of what constitutes indemnifying negligence results in a finding of no indemnification for the negligence. 1998 WL 372090.” CRT 3. a party that does not take the relevant state’s anti-indemnity statute into consideration when negotiating and drafting its indemnity provision. brought a third-party claim against Rivers & Bryan for indemnification. 1998 U. 1998). any covenant. 1993). HBE Corp.2d 672 (Iowa 1992). Inc.. Hyman Power. Dist. Rivers & Bryan.. Ry. will likely be left with no indemnity. Co. 492 N. The court disagreed. HBE Corp. are void under the Illinois Construction Contract Indemnification for Negligence Act. parties must bear in mind that the vast majority of states have enacted statutes which limit or void contractual indemnity. Inc. Ill. 2000 Proposal F. v. February 11.. • District of Columbia: Rivers & Bryan. 688 N.

Katz 22 . 1993). 42 Mass. • Massachusetts: In both Sciaba Constr. 545 N.2d 559 (1997). Suffolk Constr.2d 288. In this case.Y. Corp.E.E. Kelleher Constr. Contractors and insurance professionals need to be aware of state-to-state differences which affect the interpretation of indemnification clauses. 505 N. 428. Co. Co. v. where the court found that a Minnesota statute which rendered indemnification agreements in building and construction contracts purporting to indemnify for the negligence of a entity other than the promisor. and thus violated the Illinois Contribution Act. v.W. LEXIS 758 (1993). Frank Bean. Minnesota: Seifert v. actions for indemnification accrue when the indemnitee actually pays the liability. Formwork Services. review denied. App..2d 378 (Minn. more than two years had passed since the cause of action accrued. Other Relevant Differences Between States In negotiating and drafting an indemnity provision.. Court interpreted a West Virginia statute to void a broad indemnity agreement only where (1) the indemnitee is found by the trier of fact to be solely (100 percent) negligent in causing the accident and (2) it cannot be inferred from the contract that there was a proper agreement to purchase insurance for the benefit of all concerned. which required the contractor to indemnify the railroad for damages attributable to its own fault. 680 N. Colo. Differences in the statute of limitations which apply to both the underlying claim and the claim on the indemnity clause. v. 679 N. the courts found that the indemnity clauses in question were void under the state statute which provided that indemnity clauses in contracts for construction were void if they required a subcontractor to indemnify any party for an injury that the subcontractor did not cause.2d 903. Gerald I.2d 786. 1993).S.. these areas of concern include the following: 1. employees or delegates unenforceable did not apply when the indemnitor’s obligations are covered by insurance.. some states have statutorily modified the common law rule..1..Y. 1993 Minn. Inc. i. 681 N. 89 N. 1996).E. Although judgment in her favor was not rendered until 1990. of Minn. the court found that the savings clause portion of the indemnification provision. under the statute. Ct. 658 N. & Sur. The widow filed her action in 1985.Indemnification for Negligence Act because it required the contractor to indemnify the railroad for its own negligence. Va. West Virginia: Dalton v. the insurance company’s 1991 claim for indemnification was barred because. 432 S. 66 (1997) and Bjorkman v. its agents. App. Co. Inc. the statute of limitations is two years and the cause of action accrues when the underlying claim for liability accrues. when plaintiff discovers or should have discovered the construction site defects which ultimately caused the injury. Court held that a broad subcontract indemnification clause which could be construed to hold the subcontractor for the general contractor’s negligent acts was unenforceable because it violated General Obligation Law § 5-322. 812 F. it is important to identify and be cautious regarding differences in state law. At common law. Moreover.2d 83 (Minn. An insurance company sought reimbursement of the judgment paid to the widow of a fatally injured construction worker. Aetna Cas.. was not indemnity but rather contribution.E. 1127 (D. 189 W. In addition to the differences listed above. Ct. However. Supp. New York: Itri Brick & Concrete Corp. Corp.W. Ct.2d 98 (1993). App. Accord Katzner v. For example. Childress Serv. • Colorado: Maryland Cas. • • • H. the court found that the insurance provision of the contract made it clear that the indemnity provision was really only an agreement to purchase insurance.2d 1200 (1997).. 43 Mass. 591. in Colorado.e. Regents of the Univ.

S. Differences in the statute of repose which may affect one’s duty to indemnify for tort claims versus contract claims.Y. 1998). but the trial court dismissed it. Smith. the contractor’s duty was not stated specifically in its indemnity agreement with the subcontractor. App. Grills Const.E. Ct.. to insure a safe roadway. Kentucky: Hall Contracting Corp. Duty to provide a safe place to work. CRT • 2. 670 N. Dec. Barron’s Educ. 167 Ill. resulting in the underlying claim for which a subcontractor sought indemnity. 1568 Broadway Associates.3d 1035 (11th Cir. Serv.2d 607 (Iowa 1994). However. The owners sued the general contractor for defective bricks. Chris W. • Iowa: Krull v. and the general contractor sought indemnity from the masonry subcontractor and brick supplier. Thermogas Co. Katz . aff’d. 660 N. Contractor was required to indemnify owner and construction manager for claims raised by the contractor’s employee pursuant to a New York statute requiring owner to provide a safe place to work and proper safety protec- • • 23 Gerald I.Y. On appeal.E. in light of the fact that subcontractor supervised the work and failed to provide safety devices as required by the labor law and that the owner had no supervisory control over the work. 673 N. 1995). Knapp & Son. Inc.. 3. Co. • Alabama: Royal Ins. State laws requiring owners to provide a safe place to work may broaden the range of claims and potential liability of the owner’s indemnitor. As a result. LEXIS 29 (Ky. The court held that the action against the subcontractor could proceed under the limitations period relating to construction-related claims. 522 N. 214 Ill.• Illinois: Zielinski v. and specific terms in its contract with the state. 1998). The court determined that a highway contractor had a nondelegable duty under Alabama law. of Amer. which results in the underlying cause of action for which indemnification is sought?” New York: Baker v. where the expiration of the statute of repose for bringing a defective improvements claim also barred the dependent indemnity action. 667 N. The contractor brought a third-party indemnity complaint against the individuals who allegedly stole the explosives and made the bomb.. App. 340.W. Corp. the Eleventh Circuit certified to the Alabama Supreme Court the following question for determination under Alabama law: “Must an indemnity agreement specifically state that an indemnitor will indemnify the indemnitee for a nondelegable duty to which the indemnitee is subject under state law to require indemnification for the failure to execute such nondelegable duty. New York: Buccini v.3d 775 (Ky. 2000). 1998 WL 150783.W. App. but that the action against the supplier was time barred under the Uniform Commercial Code’s sale of goods statute of limitations. the Court of Appeals held that non-contractual indemnity against tortfeasors remained viable in Kentucky after the state’s adoption of a comparative fault system and that the statute of limitations on an indemnity claim does not begin to run until some payment is made to the plaintiff by the party claiming indemnity.E. but failed to perform that duty. 2d 571. App. Div. Co. App. 3d 735. Police officers injured by the explosion of a homemade bomb brought an action against a contractor alleging that the contractor was negligent in storing and maintaining explosive materials at construction site.. R.Y. denied.2d 1289 (3d Dist. 242 F.2d 587 (N. Inc. app.2d 398 (N. v. v. Div. 2001). 27 S.. 1998 Ky.2d 1063 (1996). Subcontractor was required to indemnify owner for claims raised by the subcontractor’s employee pursuant to a New York statute requiring owner to provide a safe place to work and proper safety protection. 277 Ill.S.Y. 1998).

Olin Corp.S.R.. The court found that while the owner dispatched persons to observe the progress and method of brick restoration work on the project. 1995).” entitled both the owner and the construction manager to summary judgment on the issue of indemnification. 480. The court held that both common law rules and “the clear contractual language allocating liability in the same manner as those rules. 985 F. 906 F.3d 10 (2nd Cir. because the construction manager’s duties were limited to observing the work. 785 (N. this did not render the owner actively negligent so as to bar its indemnification claim against the general contractor who had the authority to direct. 1993). Supp. indemnity is either contractuallybased or is implied. Consolidated Aluminum Corp.tion. The court found that an environmental auditor’s failure to discover environmental obstacles when conducting an environmental audit did not constitute passive negligence and therefore. An agreement that required a party to “observe and comply with all present or Gerald I. states may differ regarding what they consider to be passively negligent conduct and therefore eligible for relief. Village of Fox River Grove v. the owner was entitled to indemnification. Inc. 2d 573. FELA. 164 B. a.S.D. 806 F.2d 428 (1993).D. Inc.. D. 120 Wash. • But see Hoffman Const. Co. 5 F. “Indemnity” is distinct from doctrine of “contribution. See United States v.2d 642 (1st Dep’t. for example. Inc. Under Missouri law. CERCLA. 844 P. such as the Longshoreman’s Act. 1994). it did not become liable to the contractor’s employee. Additionally.2d 1427 (10th Cir. Cohen.D. Inc. 201 A. or Wetlands. The court found that. 1994). Northwest Enviro Services. App. • Arizona: Cella Barr Assocs.2d 353.” • Missouri: Irwin v. Inc. Inc. private parties are permitted to allocate liability among themselves as they see fit. 4. Scott Galvanizing. 868 P. Mo.. v. the environmental auditor brought an action for indemnification.. 6. Inc.3d 464 (Alaska 2000)(liability for non-delegable duties can be shifted to another party through an indemnity clause). presupposes actionable negligence and joint liability to the plaintiff by each tortfeasor.. 177 Ariz. U. but will each remain fully liable to the government regardless of indemnification agreements. 1994). New York: Aragon v. where the deposition testimony showed that the contractor’s negligence caused the employee’s injuries. of Alaska v. v. Under CERCLA. v. 607 N. 189 (S. • Georgia: In Re Diamond Mfg. Ga. In determining common law or equitable indemnification claims.. Environmental auditor failed to conduct a thorough examination under its contract.2d 1063 (Ct. 530 (E. 22 P. it was not entitled to indemnification. 1993). Federal statutes. Katz 24 . Subcontractor’s employee fell to his death when scaffolding collapsed. 233 West 21st St. Fabrication & Erection. or actively negligent conduct and thus ineligible for relief. Ill. Following settlement for professional malpractice.. Co. supervise and control the work. on the other hand. Supp. may apply to a particular project and could have an effect on interpretation of the indemnification clause... 1992).. • 5. Contribution. Hoover Treated Wood Prods.Y. Grayhill. Hardage. and the contributing tortfeasor is only liable for amounts corresponding to his proportional share of the fault.

17 Cal. In light of anti-indemnity statutes and strict construction of indemnification provisions. Yeargin Inc. 2d 608. v... Topeka & Santa Fe Railway Co.future laws” was broad enough to uphold the obligation to indemnify for CERCLA liability where the agreement was drafted prior to CERCLA’s enactment.S. 1994). a railroad’s indemnity claim against a contractor which sprayed its employee with defoliants was governed under FELA rather than the common law. Ind. the language was sufficiently broad to encompass the environmental liabilities at issue.. “To the fullest extent permitted by law. a. 911 F.. Pastore. Burlington Northern Railroad Co. Massachusetts: Polaroid Corp. the Clean Air Act. 146 F. 29 (D. App.. 1996).g. although there was no specific reference in the parties’ indemnification agreement to environmental liability. v. The court held that.. Government. the seller was obligated to indemnify the purchaser for the settlement amounts. Co. Avenell. 416 Mass. denied. A purchaser of corporate assets was assessed liability for a Superfund site under CERCLA. • Maine: Allwaste Environmental Servs. 254 Kan. Similarly. See Knowles v. Tennessee: Olin Corp. 1995).. entered into a settlement agreement with the U. 1998). v. and OSHA. Rollins Environmental Servs.3d 715 (5th Cir.W. 684. Potential Defenses to Indemnity 1. where the parties were aware of changing regulations. 1993). 1007 (1993). the National Emission Standards for Hazardous Air Pollutants. Inc. who defended on the ground that recent court decisions indicated the purchaser had no CERCLA liability and therefore settlement was voluntary and discharged the indemnitor. Ltd. the court found that the contractor was required to indemnify the owner for the costs. v. e. In another case. 890 S. LEXIS 2945 (2d Dist. Me. Rptr.2d 959 (1993). It then sought contractual indemnification from the seller. v.” Transamerica Ins. Interface Technology. review denied. 624 N. The subcontractor’s surety contract obligated the subcontractor’s principals to • 25 Gerald I. 13 Cal. and in order to avoid potential joint and several liability for cleanup costs. The court found that. Houston Lighting & Power Co. Supp. Thus. rev. Katz . Response: Incorporate Savings Clause • California: Myers Bldg.3d 398 (6th Cir. 1993 Cal. The court held that because the legal question was unsettled at the time of the settlement and the seller declined the purchaser’s tender of settlement approval and early demands for indemnification. fines and penalties that the owner incurred in connection with its violations of federal and state environmental statutes. a railroad’s indemnity claim against a power company for violation of the Safety Appliance Act (SAYBROOKE) was defeated because railroads are strictly liable for SAYBROOKE violations under the terms set forth in FELA. Defense that indemnification clause is void and against public policy. 4th 949. under FELA. v.E. Atchison.2d 1352 (1993). 18 Kan. 1993). parties must be sure to include a savings clause. including CERCLA. 856 P. I. CRT • • b. a broadly-phrased indemnity clause entered into prior to CERCLA’s enactment is sufficient to encompass CERCLA.2d 455 (Tex.2d 242 (2d Dist. App. 66 F.

613. Inc. Gerald I. Croall v. 521 Pa. Simpson & Son. The court held that even if the indemnity provision violated a Texas anti-indemnity statute. Bank v.2d 344 (1989) (blasting. Massachusetts Bay Transp. Paschall.. jmt. See Hurst-Rosche Engineers v. The surety paid on a bond claim and then sought indemnification. app. App. 4. summ.indemnify the surety for bond payments in their personal capacity.. Commercial Union Ins. An unlicensed contractor who was prohibited from maintaining an action for payment against the owner under the state licensing statute was also prohibited from seeking indemnity from the owner for payment to unpaid subcontractors since the law does not permit by indirection that which is directly prohibited. Air Products & Chemical. Ct. 26 Mass. 14 Kan. v.. An indemnification clause can be drafted this way if the parties are careful. 222 A. v. Katz 26 . 542 A.3d 1336 (7th Cir. b. 2d 763. c. 578 A. 1995). Supp.2d 205 (1st Dept. the court disregarded the general contractor’s defense in the project owner’s indemnification suit against the general contractor to cover a personal injury claim filed by an injured worker. The defense is available if the indemnity provision expresses a clear intention to limit indemnification liability to the stated limits of insurance provision.2d 512 (1990).E. 557 A. Defense that indemnification doesn’t extend to indemnitor’s ultra-hazardous activities/ strict liability. App. Supp. 566. 421 (E. 3. 635 N. • Burgan v. See also Heat & Power Corp. there is no duty to indemnify or defend for defamation where the insurance policy contains a professional liability exclusion clause which excludes coverage of intentional torts. the indemnitee was nonetheless entitled to protection as an additional insured under the policies the indemnitor was obligated to take out under the contract. denied.Y. a. Inc.. Defense that indemnification is limited to contractually-required insurance coverage. • Kansas: Southwest Nat. granted. La. Defense that final payment waives right to indemnification. Authority. City of Pittsburgh. 584. 115 Pa. but the principals claimed that the waiver of homestead exemptions made the indemnification provision illegal and thus unenforceable.D. 909 F. A contract requirement for insurance is not indemnification. b. Contracting Co. 799 P. and that the principals had to indemnify the surety for all amounts less the value of their homestead. toxic waste disposal. Commw. 608.2d 1320 (1988). Co. Operation of Other State Statutes • New York: Blake Elec.S.D. 51 F.2d 583 (1988). 2. Noting that the “waiver of claims” portion of the parties’ contract was clearly not intended to bar indemnification suits. A contract contained provisions providing for indemnity and adding the indemnitee as an additional insured to certain insurance policies. 320 Md.2d 264.2d 1202 (1990). For example. 1995). Smith Petroleum Co. The court held that the savings clause severed the illegal provisions from the remainder of the contact. • But see Kerr v. 896 F.. asbestos removal). Inc. 957. 526 N. 1995).

respectively.I. Regents of the University of Minnesota. Kan.2d 83 (Minn.S. The duty to defend. Ct. and liabilities of any nature now or hereafter arising. If the indemnity agreement also covers defense costs. Where one railroad company agreed to “defend [the other] from and against any and all claims.W. denied. Sanders. • Minnesota: Diebold. v. summ. review denied. CRT • Kansas: A.. Duty to Defend 1. the indemnifying railroad was required to pay both the settlement amount and legal costs of the other company’s defense.” Because the court found that claims by employees of the subcontractor fell within the scope of both the owner/contractor indemnity agreement and the contractor/subcontractor indemnity agreement.R.. Fabrication & Erection. Ct. 1349 (D. generally exists immediately upon the commencement of such action. 835 F. Inc. LEXIS 2484 (D. LEXIS 758 (1993). • Alaska: Hoffman Const. Chicago & Northwestern Transp. Defense that mutual release and settlement agreement may bar a claim for indemnification.2d 150 (Minn. the contractor and subcontractor owed a duty to defend to the owner and contractor.S. suits or damages arising out of injuries.S. Parties should understand that there is a difference between the duty to indemnify and the duty to defend. Katz . causes of action. The duty to indemnify usually arises only when the plaintiff in an underlying action prevails upon facts which fall within coverage. III.1993). 1993). 1996).. where an indemnitee who failed to tender defense to the indemnitor until three and a half weeks before trial was held to have waived entitlement to attorneys’ fees reimbursement.W. 22 P. • 27 Gerald I. jmt. 1993). Supp.5. requiring a defense for the indemnitee and requiring the indemnitor to provide that defense. costs.. Missouri: Burlington Northern R. Co. the duty to defend arises when the facts at the time defense is tendered indicate that liability will eventually fall upon the indemnitor thereby placing him under duty to defend the indemnitee. 2.” the court found that it barred subsequent claims for indemnity. Co. 505 N.” the duty to defend “is triggered merely by claims of injury that fall within the scope of the indemnity clause. 538 N. 851 S. The court held that. Inc. regardless of whether the insured is ultimately found liable. WHAT INDEMNIFICATION IS NOT A. 3. App. v.2d 28 (Mo. v. 1995). Accordingly. of Alaska v. 1996 U. Kan. Roadway Express. Inc. Dist. Co. Ct. The tender of defense is a condition precedent to the creation of an obligation to indemnify.. The nature of the underlying allegations in the complaint against the indemnitee are irrelevant to the indemnitor’s obligation to pay.3d 464 (Alaska 2000). App. Construction contractor was not required to indemnify the project owner on a claim brought by the contractor’s employee until there was a formal tender of defense by the project owner. Where settlement agreement released previous owners from “all claims.. while the duty to indemnify is “not triggered until the indemnitee is liable for damages.W. loss. 1993 Minn. App. however. See Seifert v. U. Inc..” the court found the contract to indemnify for both liability and loss.

2d 1027. Co.S. Washington: Knipschield v. Courts generally do not find an affirmative duty to defend in language “indemnify and hold harmless. West Virginia court held that to recover on indemnity claim. 1998 WL 355425. Beaver Concrete Breaking Co.” The court found that language in the policy was clear and unambiguous and unmistakably excluded coverage to the employer for employee’s bodily injury claims. 1998). and the indemnitee was required to defend itself against claims arising out of its own negligence. New York: U. The court held that an insurer must defend the entire claim against the insured. Va.. denied. Crow Const. 1998).2d 408 (1st Dept. Examples of the application of these principles: • New York: Petito v. 1996).S. The duty to defend is broader than the duty to indemnify. the indemnitor was obligated to provide a defense only against claims arising out of the possible negligence of the indemnitor. indemnitee must show that indemnitor had: (a) actual notice of underlying claim. 124 Wash.2d 778 (N. 673 N. • • Gerald I.2d 326 (1994). 178 W.Y. 1994). Held Bros. 2d 363..Y. Ct.. while the exclusion advanced by the insurer was applicable and the insurer could have excluded both its liability and duty to defend.2d 523 (Civ.S.S. 212. The court found that a ten-month delay by owner and general contractor in providing notice to insurer of accident that caused injuries was not reasonable and violated the policy condition that notice be given “as soon as practicable.N. (b) an opportunity to defend.2d 1102 (1994). Inc. New York statutes require timely notice of disclaimer. the insurer was not obligated to defend or indemnify subcontractor under its policy.4.D.” thus eliminating any duty of insurer to defend them against underlying action. Where an agreement contained reciprocal clauses for defense and indemnity. • New York: Holmes v. New York: Monteleone v. Jun. LEXIS 9694 (S.S. 357 S. App. 636 N. including those claims which it does not have the duty to indemnify. 1998 U. and (c) a right to participate in settlement negotiations. • • 5. is subject to no other reasonable interpretation. Div. C-J Recreation. West Virginia: Valloric v. and applies in the particular case. rev. v. Morgan Guar. App. Co. Underwriters Ins. As a result.2d 207 (1987). 14. Katz 28 . Owner and general contractor who were additional insureds under subcontractor’s liability policy sought declaration that insurer was obligated to defend and indemnify them against underlying personal injury action brought by subcontractor’s employee.Y.. Insurer claimed no duty to defend or indemnify the general contractor because its claims arose from operations performed by an independent contractor and because the work performed did not fall within classification limitations set forth in the policy. The court held that.Y. 872 P. An insurer bears the burden of demonstrating that a policy exclusion defeats an insured’s claim by establishing that the exclusion is “stated in clear and unmistakable language. unless the insurer can show that there is absolutely no basis for any obligation to indemnify.. Dist. Inc.Y. the court held that construing the agreement as a whole. 883 P. The court found that the more than three month delay was unreasonable as a matter of law and held the insurer obligated to defend and indemnify the general contractor in the underlying action. of New York.” Timely notice of the duty to defend must be given to the indemnitor in order to hold him liable. Dravo Corp. 161 Misc. 74 Wash. 613 N. An insurer will be required to defend an action unless it can prove an exclusion to coverage.E. with which the insurer did not comply. 29. and Trust Co..

1998). & Constr. in fact. an indemnification agreement does not absolve the liable party from its legal obligation to the injured third-party.) with the owner. C.W. Thus. v. Insurance Although risk transfer provisions have become a frequently-used risk management tool. Co. who in turn shifts it to the insurance company. The court found that the indemnitee could not. it simply provides that party with an economic avenue of recovery from the indemnitor. The Court of Appeals held that the contract failed to unambiguously incorporate by reference the waiver of subrogation clause contained in the AIA general conditions because the gen- 29 Gerald I. parties often require liability insurance to cover the liabilities transferred in indemnification clauses. Waiver of Subrogation a. A contractor hired to perform rehabilitative work on a building executed AIA Document A101/CM (1980 Ed. • Illinois: Atlantic Mut. after entering into a settlement. Typically. Metron Eng. almost completely eliminating the insurance company’s potential to be reimbursed. told the indemnitor that the parties’ indemnity agreement was not involved. The court entered judgment for the indemnitor when it found that the indemnitee never put the indemnitor on notice of a coverage issue and. 83 F. in conjunction with indemnification clauses. in exchange for valuable consideration. insurance and insurability are key factors in the risk management process. 1996). contracting parties often waive their subrogation rights in conjunction with specified insurance requirements. in an effort to limit potential disputes among participants on a construction project. Katz . Ins. construction contracts include provisions requiring the contractor or subcontractor to name the indemnitee as an additional insured on its CGL policy or to obtain general liability insurance coverage and endorsements with specific insurance coverage for the benefit of others. 2d 14. Gabe’s Const. Content A typical waiver of subrogation clause reads in pertinent part: “Owner and contractor waive all claims against each other and against all subcontractors to the extent covered by insurance obtained pursuant to the contract. parties are protected from loss by bringing all property damage under one builder’s property insurance policy which provides blanket coverage.” b.) This type of waiver operates to shift the ultimate risk of loss to one contracting party. Rather. 582 N. Function 1. Subrogation Normally. Accordingly. App. Co. The building was damaged in a fire allegedly caused by the contractor’s negligence. Inc.• Wisconsin: Wisconsin Natural Gas Co. Ct. an insurance company which pays for losses incurred by its insured has a derivative right of subrogation against the party responsible for the damage or loss..3d 897 (7th Cir. 220 Wisc. However..” CRT B.2d 118 (Wisc. v. invoke the indemnity clause because the indemnitee had duties of notice and good faith which it breached when it “lulled the contractor into a false sense of security and prevented it from mitigating its liability. Thus the contractor or subcontractor is able to pass its assumed risks on to the insurance company without itself becoming an insurer. Co. 1.. To reduce the possibility that an indemnitor will be unable to respond to its contractual obligation.

v.2d 369.2d 242. App. 1994). Accordingly.2d 65 (1st Dept. • Missouri: Automobile Ins. Rptr. Co. The court concluded that the clauses serve different purposes and are. Caveats 1. Superior Court.H.B.” c. v. App. Supp. Corp. Ct. Inc.2d 779.2d 641 (Ct.S.2d 791 (Mo. Inc.Y. subrogation is intended to allow the insurer to affix responsibility for loss on the party who caused it. 66 N.D. 106 A. Where duration of the waiver of subrogation extended only until final payment for the project. The clause is also meant to require one party to the contract to provide property insurance for all parties. v. 1985). In precluding the owner’s subrogation suit against the general contractor and subcontractor.) Waivers of subrogation are not subject to public policy statutes barring exculpatory provisions. con- Gerald I. “Inasmuch as the owner has been fully recompensed for its loss. Assurance Society Ltd. the court stated. In affirming the subcontractor’s summary judgment award against the owner’s insurer in a subrogation suit. Co. Gen. The purpose of a waiver of subrogation clause in a construction contract is to avoid disruptions and disputes between the parties working on a project. 2d 199 (2d Dist. not in conflict. aff’d. 2. H. It explained that a waiver of subrogation clause applies to claims that are covered by insurance. the contract was deemed to be ambiguous as to indemnification.” 3.E.) The insurance company has no right to proceed against the contractor or subcontractor who may have actually caused the property loss. • California: Davlar Corp. and the case was remanded for additional evidence as to the parties’ actual intent. therefore. 762 P.S. Thus. • Puerto Rico: Richmond Steel. Farrar's Plumbing & Heating Co. Co.. 793 (D. Legal & Gen. Constr.eral conditions (AIA Document A201/CM) were not listed as an incorporated document or otherwise attached/endorsed by the parties.) Where waiver is not so broad as the above standard.. 821 F.. 497 N. 158 Ariz. v. whereas indemnification clauses require one party to reimburse another for a loss or damage incurred. 1997).W. accordingly. v. A waiver of subrogation is not inconsistent with an indemnification clause.Y. the indemnification provision is inapplicable and the waiver of subrogation clause governs.Y. 485 N. the appellate court stated.R. 1988). Katz 30 .R. New York: Trump-Equitable Fifth Ave. 4th 1121. United H.2d 115 (1985). 876 S. subcontractors may not be protected by waiver in the owner/general contract.R. Contractors. 53 Cal. App. 62 Cal. P.. “The language of the [construction contract] clauses could not be clearer that fire insurance for the project was to be procured by the owner and that all parties to the construction were to look only to the insurance to protect themselves from fire loss. derivative claims by insurance companies are reduced. • Arizona: United States Fidelity & Guar. 488 N.) • 4. 1993). 354.

The insurer eventually paid a claim to the general contractor. 119 Wash. Inc. • New York: Rosato v.. App. rev. • • 31 Gerald I. Canadian Ins. App. Thus. Rptr.. 1996). CRT • Washington: Touchet Valley Grain Growers. 868 P. 177 Ariz. the mutual obligation to insure against the same risk is construed as a waiver of subrogation. Examples • Arizona: Fire Ins. 4th 93SB (4th Dist.. 30 Cal. 1994). Because a liability insurer elected not to indemnify the general contractor. Under the New York “antisubrogation rule. Supp..) Where a contractor or subcontractor agrees to indemnify the owner or general contractor.. An insurer could not subrogate the lessor’s claim against the lessee for fire losses allegedly due to the lessee’s negligence notwithstanding the lessee’s contractual duty to indemnify the lessor for such loss. The court held that the lender stepped into the developer’s shoes.3d 417 (11th Cir. Inc.” an insurer has no right of subrogation against its insured for the very risks insured against. Co.. Inc. Georgia: Macon-Bibb County Indus. it lost its subrogation rights against the parties responsible for the underlying tort. App. Nord Bitumi. 104 (E. Opp & Seibold Gen. The anti-subrogation rule did not apply because the risks of the general contractor as additional insured were not the “same risks” as the subcontractor’s general policy risks. Inc. U. per the subcontract. The subcontractor who designed the building and supplied the components was not party to or beneficiary of the owner/contractor agreement (unlike provision in the standard AIA waiver) and was therefore not protected. that indemnification extends only to the scope of the liability insurance. The lease obligated the lessor and the lessee to insure against the same type of loss. and that the waivers further bound the insurer because the insurance policy recognized the waivers’ validity. 34 Cal. 2d 334. no subrogation rights through the general contractor arose. v.tractors were not protected from insurer’s subrogation action arising out of a fire that occurred after the date final payment occurred. A construction lender’s hazard insurer could not subrogate against a subcontractor where the developer executed subrogation waivers with the general contractor and subcontractors. 29 Cal. v. however. but it did so only on its insured subcontractor’s behalf. Important to recognize the distinction between property insurance and liability insurance. Constr. v.2d 844 (1994).. Exchange v.2d 724 (1992). the waiver of subrogation provision would have no meaning. 365. 865 F.D. d. modified reh’g denied. Inc. 1994). Karl Koch Erecting Co.N. denied. Negotiated subrogation waiver in prime contract protected general contractor and its surety from liability for structural failure of grain storage building to the extent owner’s insurance covered the loss. LEXIS 259 (1995). California: Herrick Corp. 831 P. Otherwise. Thunderbird Masonry. 1993). 77 F.2d 948 (Ct. 1995 Cal.S. and not to property damage. This rule.. 2. and under Georgia law. Katz . if the parties have waived the right of subrogation.Y. 4th 753. did not prevent an insurance company from seeking indemnification from the subcontractor-insured where insurance company was subrogated to the rights of a general contractor who was additional insured under the subcontractor’s policy. Auth.

LEXIS 8136 (S. 1986). Co.B. as subrogee to the general contractor. However.R. 3d 651. Katz 32 . Legal & Gen. governed the parties’ relationship rather than the purchase order which the contractor had previously sent to the equipment company. 1993). it appeared that once final payment was made. As a result. Gerald I.. 821 F. The insurer asserted a counterclaim. Supp. The court held that the construction contract did not create a waiver of subrogation that extended after completion of the project and final payment under the contract. Ala. 1994). 876 S. 793 (D. 191. since the tenant was not a party to the construction contract. 623 A.• Illinois: Village of Rosemont v. Insurer brought a subrogation action against the contractor for property damage resulting from a fire. and thus. The court found that the plain language of the contract between the contractor and the owner waived subrogation recovery for damages to the extent that the damages were covered by insurance.E.S. 494 N. v. the contractor was required to indemnify the leasing company pursuant to the terms of the rental agreement.R. Building owner and tenant filed a subrogation action against the contractor for recovery of damages resulting from the collapse of an existing wall during the construction of a building addition. Assurance Society Ltd. General Contractors. seeking to recover from the subcontractor the amount which the insurer paid to the general contractor. Subcontractor brought a claim for declaratory relief and monetary damages against the general contractor and its insurer under the builders risk policy.. Co.2d 791 (Mo. What Contract Terms Govern the Parties’ Rights 1. McDevitt & Street Co. parties must first be clear regarding what contract terms are binding and they must execute contracts in a timely manner. Maine: Willis Realty Assocs. 144 Ill. • • • • IV. 1993). Subrogation waiver barred owner from pursuing contractor and architect for damages incurred due to a burst water pipe. Missouri: Automobile Ins. Lentin Lumber Co. 1997). 234 Va.. P. Weatherford. In drafting indemnification clauses.2d 825 (1987). Cimino Constr. United H. Ct. Inc. which a project superintendent signed upon delivery of the equipment. 360 S. Dist. Although the contract was ambiguous as to the duration of the waiver.W. the contractor retained no further interest in the project and the waiver of subrogation was rendered inapplicable. • Alabama: Fowler v. The court held that where the general contractor waived its rights against the subcontractor to the extent that the general contractor’s losses were covered by insurance. Virginia: Blue Cross v.D. Waiver of subrogation provision precluded owner’s suit against general and subcontractors for collapse of arena roof. v.2d 1287 (Me.E..2d 592 (1st Dist. the owner could not recover damages from the contractor for the collapse of the back wall of the existing building. Puerto Rico: Richmond Steel. 1997 U.. the insurer of the general contractor could not bring a subrogation claim against the subcontractor. v. Inc. App. DRAFTING INDEMNIFICATION PROVISIONS A. Federal court concluded that the terms of an equipment rental agreement. App. the waiver did not bar recovery from the contractor for damages incurred by the tenant even though the insurer had paid losses incurred by the tenant.

CRT • • • B. It was unclear from the contract whether an accident occurring during the employee’s lunch break arose out of or resulted from the performance of electrical work in the plant. Therefore. General Elec. and only CGL insurance was procured. This was in spite of the fact that the terms were not referenced on the front side of the ticket and the supervisor testified he did not read the terms. 619 A. 643. v. Iowa Beef Processors. Superior Court. Ct. Rptr. 624 N. T&B Scottdale Contractors. because it found that the transporter’s performance of the terms of the agreement and failure to object to the indemnity agreement constituted acceptance of the indemnity obligations.. it could not be enforced against the contractor. Inc. Katz . 639 A. to determine indemnification coverage. 462 S. Co.2d 285 (1992). look at contract’s insurance requirements.E. App. the contractor’s agreement to indemnify the plant owner was not enforced due to an ambiguity in the parties’ definition of the “work” covered by the indemnity agreement. The court held that the only remaining issue on remand would be a determination whether the subcontractor was “solely negligent.• California: Hansen Mechanical.2d 47 (1995). (NJ). When mechanical contractor’s employee was struck by plant owner’s crane. denied. 422 Pa. the contractor was required to indemnify the subcontractor for damages claimed by the family of an employee who was killed at the jobsite. v. App. rev. Inc. v. 33 Gerald I. Rollins Environmental Serv.. 1996 Cal. As a result.2d 29 (1993). 47 Cal. Iowa and Nebraska: Merryman v. The indemnity agreement was contained on the rental receipt.E. A California statute requires both parties to an indemnity agreement to sign the contract. 978 F. Inc. 1995). LEXIS 1153 (1996).” thereby obviating the indemnity provision. Inc. the court refused to enforce indemnification provision buried in the boilerplate language on the back of the plant owner’s purchase order. Super. The court enforced an indemnity provision in a purchase agreement. noting that neither the purchase order not the acknowledgment form were signed by the contractor. 1992). Georgia: Pioneer Concrete Pumping Serv.2d 959 (Mass. Inc. Completed operations: was the indemnitor obligated to furnish completed operations insurance? If not. 536 Pa. damages occurring after completed operations may not be covered by indemnification clause.2d 443 (8th Cir. which was not signed by the equipment lessor. Serv. Massachusetts: Polaroid Corp. The court held that. appeal denied.2d 627 (Ga. 1. 1993). The court held that the terms and conditions on the reverse side of a subcontractor’s job ticket for construction work were sufficient to bind the contractor because the site supervisor had authority and signed the job ticket.. because the indemnity agreement was not fully executed.. even though the hazardous waster transporter did not return an acknowledgment copy of the purchase agreement. What Work is Indemnified In drafting indemnification provisions. When service contractor’s employee was killed in plant elevator. Unexecuted change orders/extras may not be covered if a court determines that work (which resulted in the loss) was not part of contract and therefore not covered by indemnification clause. v. 2. 4th 722. • Pennsylvania: Hershey Foods Corp. An equipment lessor sought indemnity from a contractor for a claim made against it by one of the contractor’s workers who was injured on a leased forklift.. 143. 40 Cal. parties must clearly define the scope of the agreement’s coverage in relation to the work to which the indemnity applies.

AIA A-201 1976-1987: added specific reference to architect’s consultants as indemnities. • Missouri: Allison v. the court held that construction defects did not constitute an “occurrence” within the meaning of the CGL policy and. Construction work or architectural work: which does the indemnification clause address? Defective work claims: the majority and minority views as to whether the indemnity clause may be construed as a performance bond. An elevator maintenance contractor was not obligated to indemnify hospital-indemnitee for damages resulting when elevator door malfunctioned. v. The contractor subcontracted out most of the concrete work for the runway at Denver airport. The court affirmed a grant of summary judgment in favor of the insurer and against the general contractor in a claim for indemnity under its CGL policy. 480 (E. Ct.. The court stated that insurance was not a performance bond and could not be used to cover one’s own defective work. v.. this did not render the owner actively negligent so as to bar its indemnification claim against the general contractor who had the authority to direct. 607 N. 831 F. Inc.N. adjacent land owners.. Co. Those specifically named as indemnitees – trend has been to expand coverage—e. Co. (Minority: Florida and Arizona).2d 288 (Mo. 1996).. the developer may not seek indemnity from individual unit/lot owners. But see Kovich v. visitors to site. v. 3. During construction.g. Americas Ins. 41 Cal. the owner discovered defects in the work and required the contractor to remove and replace it. even if they did. App. coverage was barred by the “own products” exclusion found in the policy. App.2d 642 (1st Dep’t. and excluded the claim under the CGL policy Illinois: Monticello Ins. Third-party beneficiaries—e. 4th 863. 873 S. 1994). See Croydon Co. 233 West 21st St. The court noted that the use of subcontractors did not relieve the contractor of any of its obligations under the contract.D.Y.S.2d 758 (2d Dist. Unique Furnishings.. The court found that while the owner dispatched persons to observe the progress and method of brick restoration work on the project. Const. The court noted that defective work is not an accident.. 1995).. 661 N. 2. parent companies— coverage depends on normal contract interpretation rules.W. Barnes Hosp.2d 353. Katz 34 . supervise and control the work. • C.. 48 Cal.g. 1993). 66 F. but rather the outcome of not following the contract.C. Co. The contractor did so and submitted claims on its CGL policy. Rptr.2d 451 (Ill. 4. Inc. Where CGL insurer brought a declaratory action seeking a determination that it had no duty to defend or indemnify its insured general contractor in a breach of contract action arising out of defective construction of a building. Inc. • Colorado: Bangert Bros. Inc.3d 338 (10th Cir. Wil-Freds Const. Supp. App. 1994).E... • Gerald I.3.D. Which Parties Are Covered 1. Subcontractor’s employee fell to his death when scaffolding collapsed. 1996) (where a homeowner’s association sues for construction defects.. and the injured plaintiff had only alleged the negligence of the hospital. The indemnity agreement only covered the negligence of the indemnitor. Indemnity agreements do not and cannot limit rights of third-parties not in privity to the agreement. New York: Aragon v. Ct. since to allow such a claim would pit the owners against their association and thus undermine their “special relationship”). 201 A. Paseo Del Mar Homeowners’ Assn. Active/passive negligence of indemnitee.

2d 1221 (Ala. but should keep in mind that when the project relates to or involves two or more states. The court reviewed the standard indemnification clause language which provided that the duty to indemnify was confined to damages and injuries arising out of.. Louisiana: Thomas v. Amoco Oil Co. The court held that the subcontractor was not liable for property damage which occurred at the building site more than one year after completion of its work on the project because the agreement with the general contractor only required the subcontractor to purchase general liability insurance covering damage occurring while the subcontractor was actually working on the project. • Iowa: Campbell v. 184 (W. 815 F. Conroy Bros.. Co. A construction company employee was injured in a gas explosion while performing services on a gas pipeline in Texas. resulting from or connected to the execution of the subcontract work.W. ARCO Chem. v. not the state whose law would have controlled the implied indemnity claim. the court applied the law of the state where the contract was negotiated and entered. Minnesota: Seward Housing Corp. Although the project was located in Texas. the court concluded that the inclusion of the subcontractor’s duty to obtain general liability insurance in the indemnification clause indicated the parties’ intent that the duty to indemnify would remain in effect only while the work was in progress.D. La. Mid-America Constr. The court noted that general liability insurance does not typically continue after a subcontract is complete. it may be difficult to predict which state’s law will apply. he was expected to return to Louisiana.2d 667 (Iowa Ct. The court further noted that it would be inconsistent and unreasonable to impose a duty to maintain insurance to cover an obligation for indemnity that is more narrow than the scope of the indemnity clause.2d 364 (Minn. In a case that concerned whether the supplier’s implied indemnity claim was defeated by the manufacturer’s express indemnity defense. Choice of Law Parties may specify which state’s law shall apply to their contract. a completed operations hazard endorsement would be necessary to insure the contractor against accidents which occur after completion of the work. v. CRT • E. a court reviewed whether the indemnification clause in a fence erection subcontract was meant to remain in effect after the subcontract work was completed. 1998)..D. 573 N. the court applied Louisiana law to the employee’s claim for damages in excess of workers compensation. Katz .. and the injury took place in Texas.W. • Alabama: Palmer G. Owner of apartment building sued general contractor alleging negligence in the construction of the wall system and general contractor brought a third-party claim against the subcontractor for indemnification. Co. The court found “Louisiana’s policies would be most seriously impaired if its laws [were] not applied since the plaintiff was domiciled in Louisiana. App. and Louisiana would bear the social costs of his inability to work. Rather. By reading the contract as a whole.” • 35 Gerald I. The indemnification clause also provided that the subcontractor must obtain general liability insurance to insure the provisions of the indemnification paragraph. For What Period of Time Will the Indemnification Clause Remain in Effect? Parties should clearly indicate whether they intend that the duty to indemnify will continue after the indemnitor’s work is complete. 904 P. Supp. Lewis Co. Co. 567 N. 1995). 1997). 1993).

• Louisiana: Dowden v. the court held that neither the incorporation by reference clause. LEXIS 242 (Mass. However. A contractor entered into a contract with the State of Louisiana for highway construction. the place where the contract was to be performed. the highertier subcontractor argued that the effective indemnification language in its contract with the general was incorporated by reference in its contract with its subcontractor. 1993). the Louisiana Standard Specifications for Roads & Bridges (1982) by reference. courts look upon them with disfavor. Ct. the Michigan Supreme Court noted that the parties’ contract specifically referenced a Michigan statute permitting indemnification.2d 215 (10th Cir. 1996 WL 64164. the clauses should have been so drafted. which in turn contained a section obligating the contractor to indemnify the Louisiana Department of Transportation & Development for claims arising out of..2d 698 (1995). 1996 Mass. only the plans and specifications of the general’s • • Gerald I. Super. nor the savings clause in the general contract. 956 F. 1996). 666 So. New Mexico: Tucker v. Skyline Indus. 664 So.. the contractor’s negligence or misconduct. Lever Bros. where provisions which would be included by reference expand a party’s liability. inter alia. and the savings clause could have been inserted in the subcontracts but was not. Careful drafting of incorporation by reference provisions will avoid this problem.W. Generally. Oct. would be applied because it was clear that the parties explicitly contracted for the express indemnification provisions found in their respective subcontracts. the key provisions should be repeated in the applicable contract or the parties should use a properly drafted incorporation by reference clause which identifies the intended provisions by location and subject matter. Co. The parties’ contract was signed in California and performed in New Mexico. had a significant interest in enforcing its statute designed to regulate or deter specified business practices. Where the employee of a lower-tier subcontractor fell from scaffolding. In addition. denied. such as indemnification.2d 1099 (La.A. 3d Cir.2d 769 (Mo. the court applied New Mexico law because construction indemnity clauses “significantly interfere with New Mexico’s efforts to produce safe workplaces and buildings. Massachusetts: Fox v. the placement of the incorporation clause in the subcontracts was separate and apart from the indemnification clauses. Co. cert. Inc.• Michigan: Chrysler Corp. Servs.W... 113. A general contractor sought indemnification from various subcontractors on the basis of the indemnification clauses in the subcontracts and the indemnification clause in the general contract as applied to the subcontractors through an incorporation by reference provision in the subcontracts. The court noted that if the parties had intended the outcome sought by the general contractor. 1992). 1996). The contract incorporated the general highway specification manual.” • F. R.. Super. 1995). App. Incorporation by Reference Problems This is a typical problem on construction projects due to the incorporation by reference of prime contract provisions into subcontracts. Missouri: Howe v. v. The court held that the indemnification clause in the subcontracts was void under the Massachusetts anti-indemnity statute. App.. To ensure reciprocity. But the court said no. Hanson Co. Although New Mexico’s choice of law rules would indicate California law should apply. Marshall Const. Mid-State Sand & Gravel Co. 528 N. Ct. 851 S. Ct. Katz 36 .2d 643 (La. 488 Mich. and upheld the rights of the parties to have their contractual expectations enforced.. Illinois. Federal court applied New Mexico law to void an indemnity provision in a construction contract.

CRT G. Iowa and Nebraska: Merryman v. In Illinois. Indemnification clause stating subcontractor’s obligation to defend and indemnify “shall not be limited by the provisions” of the Pennsylvania Workers Compensation Act waived the subcontractor’s immunity under the Act. 146 Ill. L & R Constr.3d 949 (5th Cir. Pennsylvania: Kiewit Eastern Co. Huber.. 585 N.contract were incorporated in the sub-subcontract. an employer may be liable for contribution of its injured employee’s claims. Under Delaware law. 1995). “An employer’s agreement to forego its statutory right to limited workers compensation liability must be evidenced by something more than boilerplate terms buried on the back of a third-party’s purchase order form. Co. but only for an amount not exceeding its workers compensation liability. 1993). 2d 155. Inc. 44 F.D. Cyclops Welding Corp. if injured. Co. 1992). the indemnification provisions in the contract and subcontract did not insulate the construction manager from liability but rather supported the conclusion that the construction manager assumed a contractual duty to comply with the applicable safety regulations.3d 1194 (3d Cir. the company had a duty to defend and indemnify the oil company in the injured worker’s tort action arising out of the personal injuries at the oil company’s facility. The court held that while under the indemnity provisions. Thus. 654 A. Standard Chlorine of Del. containing insurance conditions that the parties obviously ignored in fulfilling their primary contractual undertakings. Louisiana: Johnson v. Contractor’s contractual liability to indemnify owner for employee’s injuries caused in gas explosion on site was not abrogated by the exclusive remedy provision of the workers compensation statute. Amoco Oil Co.2d 1240 (Ind. • Delaware: Precision Air. 978 F. 1995).2d 403 (Del.E. Injured worker who was on the payroll of the company which contracted with the oil company to repair a compressor in an oil and gas processing facility was an employee of the company for the purposes of the indemnification provision of the contract..” Louisiana: Thomas v. Indiana: Perryman v. The estate of an employee of the structural steel erector. Workers Compensation Problems An agreement to indemnify the owner or general contractor for personal injuries may serve to waive the tort immunity a party has as an employer because one of its employees.. Supp. Inc. Amoco Prod.. 184 (W. v. Ct. Hunt & Nichols. • • • • • • 37 Gerald I. App.. could sue the owner or general contractor and be entitled to greater damages than the exclusive workers compensation remedies available. La. not the indemnification language. an employer who has paid worker’s compensation to injured employee can still be contractually liable to third-party to the extent that the employer agreed to indemnify the third-party for claims arising from employer’s failure to provide a safe workplace. v.. Illinois: Kotecki v.2d 443 (8th Cir. The court stated. 1994). 1993). Accordingly. 5 F. sued the construction manager for negligence. Katz . Inc. 628 N. the construction manager could seek indemnification from the general contractor and subcontractor. Iowa Beef Processors. 815 F. the subcontractor had no contractual right to be indemnified.E. who was killed when he fell from a building which was not equipped with OSHA-required exterior nets..2d 1023 (1991).

• Alabama: Stone Bldg. the power company’s right to seek contribution or indemnification from the crane manufacturer was extinguished by a settlement between the estate and the manufacturer where the amount of the settlement was disclosed to the trial court for the purpose of re- • • Gerald I. 128 Wash... of Alaska v. 2000).I. 237. because the settlement agreement explicitly stated that “payment is not to be construed as an admission of liability on the part of persons or entities hereby released. unjustly or otherwise. The court held that the statute did not apply to indemnification agreements in the construction industry.” If the indemnitor did have notice and an opportunity to defend or settle. 429 S. • H.E. Hoffman Const. Lewis v.” Because the subcontractor could not show lack of notice. U. In an action by the estate of a decedent electrocuted when the crane he was operating came in contact with high voltage power lines. Moen Co. the court held the subcontractor bound by the settlement obtained by the contractor. 617 A. An insulation manufacturer sought to defeat an insulation supplier’s indemnity claim by raising the supplier’s settlement with the building owner as proof of the supplier’s liability. he is “bound by any good faith reasonable settlement. Effect of Settlement To recover indemnification for payments made in settlement of indemnity claims. Burns Bros. however. Contractors. 912 P. where no written agreement existed between the property owner and the extermination contractor.. Inc. When the general contractor sought indemnification from the subcontractor for payments made to the subcontractor’s injured employee. LEXIS 582 (Dec. Although the Rhode Island courts allow contractual indemnification as an exception to the exclusive remedy of workers compensation.. Inc.• Rhode Island: Fish v. Subcontractor agreed to indemnify the general contractor up to the extent of the subcontractor’s proportional fault. West Virginia: Smith v. “then the indemnitee has the burden of establishing that it was actually liable to the plaintiff and that the settlement was a reasonable one.” Accordingly. 22 P. the settlement did not establish the supplier’s liability. Co. 2d 745. Alaska: Palmer G. 904 P. Inc. the court refused to imply an equitable duty on the contractor to indemnify the owner against the employee’s claims. Fabrication & Erection. stating that “equity need not intervene because [the exterminator] has not been enriched. and the contractor had already paid workers compensation benefits to its injured employee. v. Settlement is usually considered presumptive evidence of the liability of the indemnitee and of the amount of liability. Donut Shop.2d 472 (1996).2d 1221 (Alaska 1995). or that it was prejudiced by the contractor’s tardiness in notifying the subcontractor of an indemnity suit against them both and the contractor’s settlement negotiations with the claimant. and that subcontractor would be liable for amounts equal to its proportional fault. The court rejected this defense. Inc. the subcontractor argued that the agreement was void because of a state workers compensation statute that prohibited an employer’s waiving workers compensation immunity. Va. Co.3d 464 (Alaska 2000). Katz 38 . (2) that liability existed. 15. 189 W. but it may be overcome by proof from the indemnitor of no liability or that the settlement was unreasonable. Monongahela Power Co. Cf. 1992). Star Elec. If not. Island Steel Erectors.. 2000 Ala.S. The court held that the key consideration is whether the indemnitor had notice of either the indemnity suit or the indemnitee’s settlement and the opportunity to be involved.2d 874 (R. however. and (3) the settlement was reasonable. Co. and the indemnitee need only show potential liability..” Washington: Gilbert H. an indemnitee generally must show that (1) the liability is covered by the contract. v.2d 643 (1993). ARCO Chem.

00 in attorneys’ fees). Higher-tier subcontractor was required to indemnify the owner and general contractor. App. Gulsby Engineering. • 39 Gerald I. the court held that the reasonableness of the fees could be challenged by the indemnitor following a full disclosure of all of the billing statements. the court found that it did not include attorneys’ fees. cert. Telephone company was required to indemnify the power company pursuant to agreement for their joint use of utility poles. I. Where the indemnity provision contained a clause providing for the reimbursement of the “expense of the investigations and defenses of all claims and causes of action. • District of Columbia: Ideal Elec. 1991). McDermott. ARCO Chem. National Railroad Passenger Corp. v. 1995).W. Inc.W.. Katz .. Ct. 1st Cir. Co. The court found that redacted portions of billing statements were insufficient and complete billing statements were essential to determine the reasonableness of the charges incurred as a whole.2d 132 (2nd Cir. Ct. Lever Bros. 846 S. Ct. However. Inc. An award of attorneys’ fees under an indemnification provision is a question of fact for the jury regarding the amount of fees incurred and their reasonableness. Drafting and Administration •. since the term “any liability” in the indemnification clause was undefined. Alaska: Palmer G. Louisiana: McKinney v. 1. 1995). Co.2d 1302 (La. 904 P. 1993). 590 So.. Where a party is entitled to indemnification. •.ducing the verdict against the power company.2d 1220 (La. The court held that the provision constituted an impermissible material change to the parties’ agreement.2d 769 (Mo. Co. 1993). 129 F. 1992). 1997). 1993) (jury awarded project owner $0. denied. 592 So. so that settlement itself no way simplified the issues in the trial between the estate and the power company. Int’l Fidelity Ins. 987 F. Attorneys' Fees. but was not entitled to indemnity from its utility pole contractor where their agreement did not expressly contemplate the contractor’s indemnification of the telephone company’s contractual liability to the power company. and the trial court had previously ordered bifurcation of the issues. 2. there was no indication that settlement was prompted by fraud or collusion.” the Louisiana Court of Appeals held that this language fairly included attorney’s fees as cost of defense allocable to the indemnitor.2d 599 (Tex. Conflicting Provisions and/or Lack of Reciprocal Coverage Due to Ineffective Contract Negotiation. A manufacturer added an indemnity agreement to a confirmation order after negotiating and contracting had already taken place.3d 143 (D. Only where the party’s evidence is clear. App.2d 1221 (Ala. accurate and uncontradicted may the court award attorneys’ fees as a matter of law. Co. v. the court remanded the case to the trial court to determine whether the purchaser agreed to the indemnity provision during contract negotiations. Ct... and refused to enforce it. However. App. CRT •. See Tenneco Oil v. J. Bell Tel. it is also entitled to recover the attorneys’ fees incurred in defending a claim.C. 851 S.. but was not entitled to indemnification from its lower-tier subcontractor because the lower-tier subcontract lacked the clear unequivocal indemnification language which appeared in the higher-tier subcontract. Cir. App. Co. Sec. See Schneider v. Missouri: Howe v. Where the indemnity agreement provided for the recovery of attorneys’ fees.2d 76 (La. South Cent.. Lewis Co. Louisiana: Burns v. 665 So.

App. 505 N. 1993 Cal. Duties of Indemnitor. the California law which renders unilateral attorneys’ fee provisions reciprocal was held inapplicable to indemnity clauses since “a contrary conclusion would defeat the purpose of an indemnity agreement. 1993 Minn.. attorneys’ fees. regardless of whether the same is within or beyond the scope of Work.. Ct. Inc. v. Inc. • • • K. by counsel acceptable to Indemnitee. The court noted “to require NewMech to indemnify the Regents before a formal tender of defense would encourage indemnitees to defend claims on their own and then. [the contractor demanded indemnification from” the subcontractor. the award of attorneys’ fees was stricken because it applied only to third-party indemnification claims. mediating or negotiating any obligation of indemnity or defense hereunder or any appeal thereof. in a non-insurance context an indemnitee is not entitled to attorneys’ fees and costs incurred to establish the existence of an obligation to indemnify. Suggested language for a comprehensive indemnity clause is as follows: The duties of Indemnitor to Indemnitee shall include. and only after. experts. Additionally. against any and all claims arising out of or related to the performance of any Work hereunder or on or for the Project. The Indemnitor shall. attributable specifically to [the contractor’s] defense against the … claims and accruing after. The court held that the contractor was not entitled to indemnification for the attorneys’ fees incurred in establishing its right of indemnity or defending allegations which encompassed its own separate wrongful acts. A provision for attorneys’ fees under an indemnity clause does not constitute a right to recover attorneys’ fees incurred in efforts other than defending the claim indemnified against. 4th 949. Ind. Co. 538 N. On appeal. the contractor was held entitled to indemnity from the subcontractor only for its “expenses of defense. LEXIS 582 (Dec. or payment for. 13 Cal. 1993). Star Elec. App. 1993).2d 83 (Minn. App. Katz 40 . but not be limited to (1) the defense of Indemnitee. Ct. v. Interface Technology. 2000). arbitrating. witness fees.W. unless the indemnity agreement explicitly states otherwise. upon demand. including attorney fees. LEXIS 758 (1993).W. denied. Litigation expense shall be paid to the Indemnitee no less frequently than monthly and within five (5) days of the Indemnitor’s receipt of a statement therefor from the Indemnitee. court costs or similar costs or expenses (all of which costs or expenses are hereinafter collectively referred to as “litigation expense”) incurred by the Indemnitee in the defense or prosecution of any claim for which the Indemnitor is or may be responsible. The trial court awarded contractor damages plus attorneys’ fees in a breach of contract suit regarding owner changes.. • Alabama: Stone Bldg. Rptr. v. Regents of the University of Minnesota.2d 150 (Minn. notify the indemnitor and hold it liable for earlier costs. promptly reimburse the Indemnitee in full for any and all litigation expense incurred by the Indemnitee whether in defending against the underlying claim or in litigating. all consultants. Inc. after the fees have been incurred.3. 2000 Ala. The court held that. LEXIS 2945 (2d Dist. Ltd. 1995). The Indemnitor Gerald I. 1993). The very essence of an indemnity agreement is that one party hold the other harmless from losses…” Minnesota: Seifert v. Thus. Inc. rev. Roadway Express. When insurance is not involved. an indemnitee is not entitled to attorneys’ fees and costs spent to establish the right to indemnification. California: Myers Bldg.” Minnesota: Diebold.. Contractors. unless the parties’ agreement expressly provides otherwise. 15. which statement shall be prima facie evidence of the reasonableness and correctness thereof.2d 242 (2d Dist. 17 Cal. review denied. and (2) the retention of.

from any monies otherwise due the Indemnitor hereunder or under any other contract or agreement. the provision of this Agreement requiring indemnification and shall apply regardless of whether or not the Indemnitee is found liable for negligence. the Indemnitee may withhold. servants and others. agents. in whole or in part. in whole or in part. hold harmless and defense agreement. a sum of money which. from time to time. and secure the cooperation of its employees. in the sole judgment of the Indemnitee shall be sufficient to secure the performance of the Indemnitor’s obligations under this indemnification. CRT 41 Gerald I. in assisting the Indemnitee in asserting any and all defenses available to the Indemnitee. Katz . At its sole discretion. The Indemnitor’s obligations to defend the Indemnitee shall survive any judicial determination invalidating.shall cooperate. In no event shall the Indemnitor’s obligations hereunder be limited to the extent of any insurance available to or provided by the Indemnitor.

2d 825 (1987)... 233 West 21st St..R.... 143 N.... 703 A.E. 1996) CRT–27 Automobile Ins... CRT–23 Aragon v... CRT–32 Bethlehem Steel Corp. Corp..... 868 P. Inc.. 66 F.. 235. 667 N.. 1994) ............ .W. Serv..... CRT–24 Burlington Northern R. CRT–11 Gerald I.. 673 N. Co. summ. 278 N.. & Developers... ...S.... .... Ct.. 1996)....1993). United H.. App......2d 209 (1996)..... 1998) .... Pastore... Inc...D. App... Barron’s Educ. 1996). 1996).... CRT–7 Campbell v.. ..3d 431 (10th Cir. v... Suffolk Constr.. 911 F... Inc..3d 795 (7th Cir..... Paschall.....D..2d 559 (1997) .... Kiewit Const..Y...Y.. Inc..D. Ct.. Boyer Washington Boulevard Assocs.... Co.. CRT–22 Chrysler Corp. Contracting Co. 1997) .. App.. Corp.........W. Super.... Americas Ins.. Supp. CRT–25 Allison v.E. McDevitt & Street Co.. Co..2d 791 (Mo.. 607 N..... Ct. Utah 1993).......J.. & Constr. Commission. . Div..... Contractors. 856 P..2d 1063 (Ct. 1996)..... Supp........2d 288 (Mo.... aff’d.. Ct...... CRT–18 Collins v... 591... 1568 Broadway Associates..... Servs.W. 824 F.. v... CRT–13 Buccini v. Me..... CRT–33 Carvalho v.. CRT–34 Church v... 1996 U. 42 Mass. v.. CRT–25 Burns v.2d 904 (Mass.. Chicago & Northwestern Transp.W... Mar......... McDermott. denied..... Katz 42 . CRT–21 Bangert Bros. Sanders. 1993).. Cohen......... 1995)......... v.2d 76 (La. App.. 521 Pa... 1996).. CH2M Hill Northwest. Inc... CRT–30 Brown v. 480. LEXIS 4001 (N.. App....... 83 F.... 83 F. 679 N....Y.. ......2d 352 (Utah 1993). 1998) .. . Inc. 140 N. CRT–24 Blue Cross v.. 675 A. CRT–32 Atlantic Mut..... Co..2d 28 (Mo. CRT–37 Callahan v.. 115 Pa. J......... v..3d 897 (7th Cir..... 1994)....2d 587 (N...2d 492 (App.S. 1994). 27..........S............. denied..3d 338 (10th Cir....2d 667 (Iowa Ct... 488 Mich... Inc. CRT–32 Allwaste Environmental Servs....B.. 74 F. Inc. 1349 (D.......E.......... Welch Equip.2d 264. 451........ v.. 36 Mass.. cert.. . Ill.. 1995) ... Ct...2d 398 (N... City of Pittsburgh.. v. 222 A. 566... Dist. Ins. 876 S. 613.. v. Div. Dist... 608.. A....TABLE OF AUTHORITIES A.. Mid-America Constr. 113.. CRT–22.2d 726 (1995).2d 134 (1994) .. 528 N... granted. Co... Corp... 542 A.. CRT–10 Biedzycki v... .... Kan.. 567 N.. 326...S. Ct. Super. 191... CRT–12 Cella Barr Assocs. 1994).....S...Y.. App..... CRT–21 Burgan v.. CRT–30 Baker v...2d 353.....2d 344 (1989)...2d 39 (Pa.. Div...E. CRT–12 Bjorkman v.2d 698 (1995). Kan....... Inc.. remanded.2d 265 (1993).... Co..... 873 P. 1998 U.. 658 A.. CRT–28.. CRT–19 City of Pittsburgh v.Y. 1997).W.. 665 So... Northeast Illinois Regional Commuter Ry.... 157 Pa..... MATX... App.. v. 1998). App.. American Asbestos Control Co..... Gen...2d 205 (1st Dept... Supp.. 1995). 651 A... 1998 WL 150724.. jmt.... 1995)................. CRT–18 City of Dillingham v... 29 (D. 557 A. 360 S.. ..R...2d 642 (1st Dep’t. CRT–20 Blake Elec... 565. 629 A.. Co..S. 851 S. 835 F... app. Ct. 635 N.. 634 N. v....... Toll Bros...... Inc.I.J. Co. Ct.J. 1st Cir. App.... and aff’d.. 1532 (D...Y.. App.. ...... LEXIS 2484 (D.. General Motors Corp. . Const...... Skyline Indus....S.. App.. v.. 670 N. 873 S.. Co.. 234 Va......... 201 A.... Co..2d 583 (1988)..CRT–15.. Inc....... 177 Ariz.. Metron Eng....2d 1271 (Alaska 1994)...... CRT–14 CIG Exploration....... Barnes Hosp. Hill..... Commw...

..... v. Super. Ct...CRT–34 Ericksen v. App...S.. CRT–36 Fowler v. Inc. Harbert-Yeargin... 2000)..... CRT–29 CRT 43 Gerald I... 1995 Cal.. Childress Serv.. CRT–32 Dalton v.. CRT–18 Hansen Mechanical......... 1993)...... Corp......D........ 1994). Ct. App. LEXIS 19261 (N.... 852 P..... 1997)....... Conway Corp.. 671 N.. v. Duke/Fluor Daniel.. Inc..2d 98 (1993).... Rptr. Katz .W. 1998 WL 372090.... 428.. 1996 Mass......... v.. 1996)...2d 938....... 3d Cir.. . 1995).... ... 1995). Certainteed Corp..... App......CRT–8 Croall v. 279.... 957. 29 Cal....... CRT–9. review denied.......... aff’d. Dist... 4th 500.. 664 So. .. 1996).... Co. 2d 668 (2d Dist........... 666 So.I...2d 477 (D... 1996).. 1997).... 1998 WL 150783. 1997 Consoc... 858 P.. LEXIS 3254 (Dec. CRT–11 Federal Paper Bd.. Co.. .... 40 Cal.... 912 P......... CRT–11 Dowden v......2d 47 (1995).. 944 F... 1994)..... Dist... Inc........... 221 A.. App..... 42... Co...... 741 N.. 578 A.. Canadian Ins... 4th 753... Long Elec. .... modified reh’g denied.... 1998)... CRT–28 Diebold. LEXIS 1153 (1996) . v.. denied.W. 1997 WL 781829.... 30 Cal... Inc. v.. LEXIS 242 (Mass............ 189 W. Supp........ ... App..Continental Heller Corp........... Moen Co... Smith.... 4th 93SB (4th Dist...C.... CRT–7 Grunley Const........ v........ 1997 Cal.... Va........... Co...CRT–9 Field v....... Unique Furnishings... 175 Ariz. Mid-State Sand & Gravel Co. Ry.....S... 34 Cal..........D. Inc. Amtech Mechanical Services..... 177 Ariz. Ga. Island Steel Erectors.E. Exchange v...... App. CRT–20 Davlar Corp..... 831 F.. 1992).. Inc..... 1993).. CRT–13 Dixon v... CRT–25.... 617 A. CRT–17 Hall Contracting Corp.. .. CRT–24 Herrick Corp. Rptr.. Inc...2d 472 (1996).. 884 S.D. denied.. Co........ CRT–16 Hagerman Const.. Co.... 62 Cal. 1996).. Semac Elec. cert. CRT–36 Gillmore v. Superior Court... 53 Cal.. ....E.... v... 1999) . Norfolk & W...2d 849 (1994). Kan...... v.... 1998 WL 376344..... Ct. Authority.. Ct. Marshall Const..C....2d 1320 (1988). Rptr.......... App..... CRT–14 Fish v. .... rev. 868 P..3d 775 (Ky. 1998 Consoc.2d 844 (1994).... v.....2d 1226 (Ariz.... Thunderbird Masonry. CRT–9 Heat & Power Corp.. 1992)... v. App. 1996).....S.. 432 S...2d 588 (4th Dep’t.. 4th 722........ CRT–38 Dillard v. Ala.... 2d 1361 (N.. 2d 199 (2d Dist. App... App... 47 Cal. CRT–29 Fire Systems. App.... CRT–30 Fox v......... Ct. CRT–19 Fiorello v.....N.. . Shaughnessy. 1998 Ky... 1995) ..... 1996 Cal.... Burns Bros.Y..... 53 F...E.2d 1202 (1990) .. LEXIS 29 (Ky.. Rptr.......... 8. App.... 27 S.. 53 Cal.. denied... Ct... CRT–24 Croydon Co. . ..... CRT–21 Hamelin v....... 1501 (D.... LEXIS 259 (1995).. denied.E... Ct. App..D..2d 86 (Vt. Simpson Paper (Vermont) Co. 177 Ariz. 676 A.. App.....W.. LEXIS 1818 (1998)..2d 722 (Mo... v.. 1997)......... Super.. LEXIS 2609 (1997) . CRT–10..... Supp.....D............ 702 A... 480 (E.. App.2d 995 (Utah 1993)..... Air Products & Chemical. Inc. CRT–34 Gilbert H. Ct.... Oct..2d 150 (Minn... 1997 U.. 320 Md.. 61 Cal.. Corp........2d 1099 (La.. 526 N...... Supp. 867 P...2d 390 (Ind....... Universal Builders Supply Corp.2d 643 (La. Super....... 4th 1121..... Fickel & Scott.. 2d 745................. 538 N.. 1998). Park Steel Corp. Massachusetts Bay Transp..... 1996 WL 64164... CRT–16 Fire Ins.. 128 Wash... rev... Superior Court... LEXIS 8136 (S. Roadway Express. 1997) . 1998 U. CRT–31 Hauskins v........2d 953 (Mass.... v... 26 Mass........ Inc... 634 N. Ill... v.. 1997)......... Super.. Salt Lake City Corp...... Inc... Inc.......2d 874 (R... 584.... Inc. CRT–13 Erland Const......... 2000)...... Co....2d 948 (Ct..... 365....... v..... CRT–14.. McGillicuddy.. Weatherford................ Inc. Donut Shop... rev.

..... 812 F......... 146 Ill.. 1994).. 1993) ..2d 778 (N. CRT–22.. 1992). 48 Cal...D.. Co.. CRT–15.. 715 (D. C-J Recreation........2d 443 (8th Cir.... 18 Kan. CRT–20 Kerr v.S.... 1992)........ Ct... Converse Consultants.. 1993).. Atchison....... Emscor...2d 672 (Iowa 1992) .......W. Co. 636 N. 1994) . Bell Tel....... CRT–17 McKinney v..... App...... Ringland-Johnson-Crowley Co.. . Crow Const...... 639 A.... CRT–11 Man GHH Logistics GMBH v..... ....... 89 N........ Me.. Co.Y. ..CRT–31. 930 P. Inc....D...... Hoover Treated Wood Prods.. South Cent..C... ...2d 769 (Mo..... appeal denied.. CRT–23 Howe v.. Co..... Aetna Cas.. 693 A.... 2d 758 (2d Dist.... CRT–17 Irwin v. 2d 1027..3d 765 (5th Cir..... cert. App. 673 N. denied. Rptr... Amoco Prod. 1998).... Wal-Mart Stores.. CRT–36 Holmes v.2d 455 (La. v.. v... Fabrication & Erection.. Co. . CRT–21 Leitao v.. Douglas Co... 422 Pa. 1996) . 858 S.. Supp... CRT–37 Hurst-Rosche Engineers v.. 1997) ......Y.. 1996) ..... Morgan Guar..... CRT–19 Hoffman Const.......2d 285 (1992). Serv.. . 635 N..2d 888 (N... . Ct..... 1127 (D.. 585 N... CRT–34.... 22 P.. App... 51 F.....W. CRT–26 Gerald I. 890 S.. Co. denied. CRT–32 Krull v... Thermogas Co....2d 1302 (La..... 1995). jmt...Y......... 1995) ... App... CRT–14... 1995) ....... Supp.. 909 F. .. L & R Constr.....R...3d 1336 (7th Cir.........3d 143 (D.... U.W. CRT–37 In Re Diamond Mfg... Co. Sears.... v....... 545 N...... Burlington Northern Railroad Co.. 124 Wash.............. 44 F. Cyclops Welding Corp......2d 1209 (N... Co.........2d 326 (1994) . 77 F...... CRT–26 Houston Lighting & Power Co..W... Cir.. 856 P....... 1993) . Inc. CRT–20 McGoldrick v... denied..2d 786............. CRT–20 Johnson v... 1996). Supp..... A...... Co.. rev.... 536 Pa. Co. 1997) ..2d 29 (1993) .. CRT–31 Herter v.....2d 1352 (1993).... v.. 680 N.... 1996). Inc... Inc........... .... App. of Alaska v.... Colo.2d 607 (Iowa 1994)...... 3d Cir.. Co.. 129 F.... 14th Dist.. 1991)... CRT–18 Martin v.. CRT–29 Malecki v... CRT–23 Kotecki v. Lou Ana Foods.. Ct. Smith Petroleum Co....... and Trust Co. 1995).3d 949 (5th Cir....... Ga....... 1007 (1993).... 24 F... La..E...S... 1994). Nord Bitumi........... 649 So.Hershey Foods Corp... 530 (E..S.... Super. 41 Cal..... CRT–35 Knipschield v.... 1995).. CRT–35 Monteleone v. 608.... General Elec. 906 F.... Inc............... Iowa Beef Processors.. App.2d 378 (Minn..... 5 F.2d 41 (Tex...........3d 417 (11th Cir..... 2d 155.... .S. 592 So.. Mo..Y. 658 N. D... summ..... App...J.CRT–35 Kovich v............ App....... CRT–24 Ideal Elec.. Paseo Del Mar Homeowners’ Assn.. Ct........... Damon G... CRT–10 Maryland Cas.......2d 1023 (1991)... Commercial Union Ins... 143.......... CRT–7 Merryman v. 590 So.. 189 (S..... 164 B.. CRT–37 Medallion Dev.. 4th 863. Div... Inc...... v.... 2d 608........S...3d 464 (Alaska 2000) ............. v. 212. Topeka & Santa Fe Railway Co.2d 115 (Nev...... Sec...Y.... of New York.............. 254 Kan...W......Y. U..... Inc.. CRT–25.... Supp......... v...2d 1200 (1997).. 896 F.. 872 P. CRT–11 Macon-Bibb County Indus.. granted..2d 1102 (1994)..... ....D.. rev. 899 F. Inc... Inc..... 619 A....... Int’l Fidelity Ins.... Supp............ CRT–22 Itri Brick & Concrete Corp. 643..Y..... 883 P..S. Inc.......... 978 F. Roebuck & Co.... Formwork Services.2d 1220 (La.. 1997) .. 1994).... Ct......2d 408 (1st Dept.... 74 Wash. Kelleher Constr.. Katz 44 . CRT–22 International Paper Co. 1995).. v...... CRT–26 Knowles v. ...... Co. Inc.. 1993)...W... 522 N..E.. 851 S... Div.. Co. 492 N............... .. CRT–35 Katzner v.... CRT–24 Kiewit Eastern Co.....3d 1194 (3rd Cir......... & Sur.. Lever Bros..2d 455 (Tex....2d 903. A&A Brochu. Auth. 421 (E.. App..... Super...... v......

... Consolidated Aluminum Corp.. v.. 1992)..... CRT–7........ 2d 363... amended on recon... v Conroy Bros...... CRT–32 MSI Constr..2d 288..2d 364 (Minn.... CRT–25.. National Railroad Passenger Corp. Kasler Corp.........C. 904 P.E.... (NJ). Inc.. 1993) . 10 Cal.. 1993) ... Murray Equip. 825 F. of Minn.. App. .......2d 959 (1993)........... CRT–11 CRT 45 Gerald I...Y.. ... DeMaria Bldg...... Yeargin Inc.. 1993). 987 F.... CRT–22 Olin Corp.....W........ 1180 (D.Y.... 58 (D.. 513 N.. v. Inc..W.S..... v.. 661 N. CRT–23 Palmer G. Interface Technology......E............... v....... ...W.. HBE Corp. Inc....... Rptr... CRT–12 Petito v. R..... CRT–22 Seifert v...... Supp..... Assurance Society Ltd......... 17 Cal.. 43 Mass...... App... Inc.. Div. 2001) .. CRT–33 Sherman v... review denied. v. 66 (1997) ..... App........ 120 Wash.. ..... CRT–37 Perryman v..................S......... 1998)..... CRT–18.... I.......... v. Corvo Iron Works..... 865 F.. reh’g denied.2d 1221 (Ala.. 208 Mich.. Corp.. CRT–20... 13 Cal. 1993)....... 1993) .. 613 N... Katz .....CRT–28... Rollins Environmental Servs.... Utah 1994)...... Lewis/Boyle.... Grills Const........... 13 Cal.. CRT–37 Sciaba Constr. Inc... App..... Superior Court. ... 593... .2d 959 (Mass.... Supp......... Utah 1994)........ Co.2d 1240 (Ind...........W.. 340..Y. Northwest Enviro Services................2d 523 (Civ.......CRT–16...... CRT–14 Richmond Steel.. Inc..... v............ 1995) . 146 F. 793 (D....... CRT–14...... Inc. Del.....2d 627 (Ga.... 671 N....... R...2d 403 (Del... Supp....... Supp........E......... CRT–20 Scott Galvanizing.. 1380 (D.. Kennedy Memorial Hosp......... 203 Mich....2d 83 (Minn..2d 464 (N.. 416 Mass. v..2d 428 (1993)........ 1994)...... App. CRT–35 Richardson v...3d 1035 (11th Cir........ of Amer.. 1992) . 855 F...... Co.. Supp. Inc. Pa. CRT–21 Salt Lake City Corp...3d 398 (6th Cir.2d 79 (1995)...... Co....... CRT–19 Rosato v.. CRT–7... 2d 573.. CRT–36.....E........R.. CRT–12 National Union Fire Ins.. 4th 1484... 624 N.Y......... CRT–15 Schneider v. Ltd... 681 N... Ct...... ..2d 451 (Ill... v..........2d 533 (Ind.. Inc....2d 631 (D. .. Beaver Concrete Breaking Co.. Wil-Freds Const... Frank Bean.... 11 Cal... Ct... 1993 Minn. App.. City of Wilmington..... v.... Inc.. v... v...... Co.. 4th 949.... 838 F... Ct.......E..... v... 242 F... 1995) . 1995) .3d 10 (2d Cir.. Karl Koch Erecting Co. ... 1993).... Ind.... 899 F.. Ct. 844 P. App....Monticello Ins. modified.... App.. John F........ 4th 1206E (1st Dist.. 684...2d 242 (2d Dist..... 47 F.3d 316 (9th Cir.. CRT–38 Seward Housing Corp.. Ct.. App.............E. App.... 1995)..... App....... Hunt & Nichols... App.2d 187 (1994).... v.... 1995)..... App.......... 628 A. Inc.. P.... Ct.. .... 1996). CRT–8 New Zealand Kiwifruit Marketing Bd.... CRT–33.............. Standard Chlorine of Del... Supp... CRT–31 Polaroid Corp.... 1560 (D... CRT–29 ROTEC...D......... 5 F.E.E.. v. CRT–15 Olin Corp. CRT–35 Peter Culley & Assoc...... 821 F. Inc... CRT–23. 628 N. Legal & Gen.... Ltd..... CRT–31 Polaroid Corp... ....... v. Rollins Environmental Serv........... v. Inc... Co. 462 S... 624 N. Inc.. v.2d 132 (2nd Cir....... Huber..... . 626 N....Y. ARCO Chem...... LEXIS 758 (1993). 1993)... Inc.......... 1993). CRT–30 Rivers & Bryan........ CRT–26 Pioneer Concrete Pumping Serv.... CRT–13 Myers Bldg. review denied. Showa Shipping Co. 573 N... v. 1993). 672 N.. CRT–7 Royal Ins.. CRT–38 Narvaez v...... 1993). 842 F. 104 (E...... Div......... 1993) . LEXIS 2945 (2d Dist.S. CRT–23 Precision Air. Inc................. Rptr. 505 N..N......2d 624 (1st Dist....... 4518 Assoc...... Inc....... 1993 Cal...... 161 Misc.. Regents of the Univ. Co... Co. 1994).. ....... 1994) ........... Lewis Co.. 1998) ........ 1998) ....Y...D..... Inc. .. T&B Scottdale Contractors.. CRT–16 Nguyen v... 979 (E......... East 67th Street Owners. Inc.....CRT–8 Negroni v.. 654 A.. CRT–10.......... Ct.2d 859 (N.... 527 N.... Managers. Supp. v. 1998)....

CRT–26 Van Vickle v... CRT–17 Smith v. ...2d 115 (1985)..........W..2d 599 (Tex.. Ct... 340. Inc.... Ct.. ..... 1992).. 1993... Knapp & Son... Opp & Seibold Gen.... Inc. ....2d 782 (1995).. Inc.W. 275 Montgomery County Circuit Court. CRT–34 Turner/Ozanne v....... 1986)..A. .. Chris W.... cert. v...... 1988).. Grayhill....S.S...D.. ...... CRT–22 Village of Rosemont v.... App. Green Construction Co.........Y....... Inc.......S..2d 512 (1990). Ill.. CRT–36 Southwest Nat.........E. Constr.. C....... CRT–38 Sun Co.. Hardage...... 237...... 914 S... Bank v.... CRT–33... app... 877 P...... v. Lyles. Maryland Drywall Co.. 214 Ill.2d 632 (Okla.... Star Elec.. App........ Simpson & Son. 3d 651..Slater v. Co. 660 So.2d 207 (1987).. Dravo Corp. 1993) . 518 U...... CRT–19 U... Co. .2d 17 (La.. 582 N..2d 457 (Tex.. 266.2d 527 (Tenant Work Contract. CRT–30 Winter v. 1995)...... 184 (W. 1995). CRT–19 Tenneco Oil v.E....... LEXIS 9694 (S... 956 F.. NL Industries.. Gabe’s Const...........D. 1997). App. ... H.... CRT–35 Touchet Valley Grain Growers.. 1994)................ App........ CRT–26 United States Fidelity & Guar....2d 1287 (Me.. 354... CRT–8 Wisconsin Natural Gas Co... Va... Inc......... Monongahela Power Co........2d 242...2d 780 (1996).2d 1063 (1996). CRT–15 Willis Realty Assocs.....H..... 18 (N..E.... 1993). Constr.... CRT–28 Tucker v. Co..... 911 S.......W...2d 647 (D. 985 F. Farrar's Plumbing & Heating Co. denied.3d 1312 (7th Cir.. App.. 1993)... 831 P. 1993)... . App.. 485 N.. 912 P. Inc. 1997) ..... Co... Hyman Power..... . 66 F.. Co.. . 815 F........... Va. CRT–17 Stone Bldg....D.E. CRT–30 W. Ct. Inc. Co....... Inc... .... 195 W. CRT–12 Tanns v... cert. v.... 1999)..........2d 369..... Underwriters Ins.. Inc... 1998 U..2d 724 (1992)... LEXIS 582 (Dec.. denied. 624 So........ Va.. v.. Held Bros.. Jun....2d 643 (1993)... 35 Mass.... v. Inc. 2000 Proposal F. v.. Lawson-Avila Constr. Turner Constr......... Co.. 1985)..... ... 220 Wisc... 1995)..... Inc.. 2d 571... Pa...2d 118 (Wisc............. CRT–9 Wallace v... Contractors. Ct.. v.. Ben A. 846 S... 2000) ..... 660 N. Hanson Co.E.. .. 688 N.. App...... 4th Cir..... 1028 (1996).. Supp....... 839 F. v. 189 W... 497 N... 2.. 556 N...... CRT–10 Village of Fox River Grove v.......E... Sherwood Constr..... ... Supp. 1999 U.2d 779...... App... CRT–27 Wolfe v..... 806 F.....Y...2d 592 (1st Dist. aff’d.. CRT–16 Smith v...S...... Supp. CRT–22 Urban Investment & Dev..... CRT–37 Thomas v.. 1992). 488 N... CRT–24 Spell v. Gulsby Engineering. 158 Ariz... Ct.. 15....M........ Ct..... 119 Wash. 673 A.. Corp.... CRT–10 Webb v... 2000 Ala. App.. 1998).......2d 829 (1993). App.. Smith.... Co........... v... 1993). Ct...... Co...2d 238 (Minn........... La.. 2d 334... 714...... 667 N..2d 667 (Ill. Dec... Scheurer and Sons... 106 A..2d 1289 (3d Dist.....D... 29..2d 65 (1st Dept. 1998).Y........ 178 W. .. 14. CRT–23 Trump-Equitable Fifth Ave...... CRT–36.. LEXIS 13453 (E. Katz 46 .. Amoco Oil Co..E... CRT–17 Valloric v. R.. 357 S..... 466 S. February 11.. 2d 763............................. Co.... CRT–11 Zielinski v. 616 N..... ..... 2d 14..........W...2d 641 (Ct.....R.... 785 (N.S. CRT–21 Gerald I. Borenstein and Co. Central Plumbing & Heating Co... 494 N. 1995).. ...... App.W... Ct. CRT–28 United States v.... Inc... v.. Avenell... CRT–18.. Ct. 1996). Co. App. 66 N. 167 Ill. Inc. 1995).... 100.... 1996)..S..W. 618 So.2d 1427 (10th Cir. Sept. Inc. Canal Marine Repair..... 144 Ill... Schlosser Co.............3d 715 (5th Cir. 1993).... Inc.E.... 3d 735........ 1998 WL 355425.....N. App....D. Dist.. 14 Kan......... Brown & Root Braun....C. denied....2d 1224 (La...2d 215 (10th Cir... CRT–29 Transamerica Ins.D....... Ill.. 623 A..Y. CRT–15 VanKirk v. App. 799 P... 762 P.. 277 Ill. Lentin Lumber Co.. 429 S.... v.. Dist... . .2d 899 (La... Cimino Constr... ..E..